Provide tuition-free public higher education; levy taxes

hb854_00_IN

As Introduced

136th
General Assembly

Regular
Session
H. B. No. 854

2025-2026

Representatives Abdullahi, Rader

Cosponsors: Representatives Lett,
Cockley, Piccolantonio, Synenberg

To
amend sections 319.202, 319.54, 5747.02, 5747.03, and 5747.07 and to
enact section 3345.012 of the Revised Code
to
provide a state-subsidized, tuition-free public higher education to
Ohio students and to increase and levy taxes to fund that subsidy.

BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section
1.
That
sections 319.202, 319.54, 5747.02, 5747.03, and 5747.07 be amended
and section 3345.012 of the Revised Code be enacted to read as
follows:

Sec.
319.202.
Before
the county auditor indorses any real property conveyance or
manufactured or mobile home conveyance presented to the auditor
pursuant to section 319.20 of the Revised Code or registers any
manufactured or mobile home conveyance pursuant to section 4503.061
of the Revised Code, the grantee or the grantee's representative
shall submit, either electronically or three written copies of, a
statement, in the form prescribed by the tax commissioner, and other
information as the county auditor may require, declaring the value of
real property or manufactured or mobile home conveyed, except that
when the transfer is exempt under division (G)(3) of section 319.54
of the Revised Code only a statement of the reason for the exemption
shall be required. Each statement submitted under this section shall
contain the information required under divisions (A) and (B) of this
section.

(A)
Each statement submitted under this section shall either:

(1)
Contain an affirmation by the grantee that the grantor has been asked
by the grantee or the grantee's representative whether to the best of
the grantor's knowledge either the preceding or the current year's
taxes on the real property or the current or following year's taxes
on the manufactured or mobile home conveyed will be reduced under
division (A) of section 323.152 or under section 4503.065 of the
Revised Code and that the grantor indicated that to the best of the
grantor's knowledge the taxes will not be so reduced; or

(2)
Be accompanied by a sworn or affirmed instrument stating:

(a)
To the best of the grantor's knowledge the real property or the
manufactured or mobile home that is the subject of the conveyance is
eligible for and will receive a reduction in taxes for or payable in
the current year under division (A) of section 323.152 or under
section 4503.065 of the Revised Code and that the reduction or
reductions will be reflected in the grantee's taxes;

(b)
The estimated amount of such reductions that will be reflected in the
grantee's taxes;

(c)
That the grantor and the grantee have considered and accounted for
the total estimated amount of such reductions to the satisfaction of
both the grantee and the grantor. The auditor shall indorse the
instrument, return it to the grantee or the grantee's representative,
and provide a copy of the indorsed instrument to the grantor or the
grantor's representative.

(B)
Each statement submitted under this section shall either:

(1)
Contain an affirmation by the grantee that the grantor has been asked
by the grantee or the grantee's representative whether to the best of
the grantor's knowledge the real property conveyed qualified for the
current agricultural use valuation under section 5713.30 of the
Revised Code either for the preceding or the current year and that
the grantor indicated that to the best of the grantor's knowledge the
property conveyed was not so qualified; or

(2)
Be accompanied by a sworn or affirmed instrument stating:

(a)
To the best of the grantor's knowledge the real property conveyed was
qualified for the current agricultural use valuation under section
5713.30 of the Revised Code either for the preceding or the current
year;

(b)
To the extent that the property will not continue to qualify for the
current agricultural use valuation either for the current or the
succeeding year, that the property will be subject to a recoupment
charge equal to the tax savings in accordance with section 5713.34 of
the Revised Code;

(c)
That the grantor and the grantee have considered and accounted for
the total estimated amount of such recoupment, if any, to the
satisfaction of both the grantee and the grantor. The auditor shall
indorse the instrument, forward it to the grantee or the grantee's
representative, and provide a copy of the indorsed instrument to the
grantor or the grantor's representative.

(C)
The grantor shall pay the fee required by
division

divisions

(G)(3)

and
(5)
of
section 319.54 of the Revised Code; and, in the event the board of
county commissioners of the county has levied a real property or a
manufactured home transfer tax pursuant to Chapter 322. of the
Revised Code, the amount required by the real property or
manufactured home transfer tax so levied. If the conveyance is exempt
from the fee provided for in
division

divisions

(G)(3)

and
(5)
of
section 319.54 of the Revised Code and the tax, if any, levied
pursuant to Chapter 322. of the Revised Code, the reason for such
exemption shall be shown on the statement. "Value" means,
in the case of any deed or certificate of title not a gift in whole
or part, the amount of the full consideration therefor, paid or to be
paid for the real estate or manufactured or mobile home described in
the deed or title, including the amount of any mortgage or vendor's
lien thereon. If property sold under a land installment contract is
conveyed by the seller under such contract to a third party and the
contract has been of record at least twelve months prior to the date
of conveyance, "value" means the unpaid balance owed to the
seller under the contract at the time of the conveyance, but the
statement shall set forth the amount paid under such contract prior
to the date of conveyance. In the case of a gift in whole or part,
"value" means the estimated price the real estate or
manufactured or mobile home described in the deed or certificate of
title would bring in the open market and under the then existing and
prevailing market conditions in a sale between a willing seller and a
willing buyer, both conversant with the property and with prevailing
general price levels. No person shall willfully falsify the value of
property conveyed.

(D)
The auditor shall indorse each conveyance on its face to indicate the
amount of the conveyance fee and compliance with this section and if
the property is residential rental property include a statement that
the grantee shall file with the county auditor the information
required under division (A) or (C) of section 5323.02 of the Revised
Code. The auditor shall retain the original copy of the statement of
value, forward to the tax commissioner one copy on which shall be
noted the most recent assessed value of the property, and furnish one
copy to the grantee or the grantee's representative.

(E)
In order to achieve uniform administration and collection of the
transfer fee required by
division

divisions

(G)(3)

and
(5)
of
section 319.54 of the Revised Code, the tax commissioner shall adopt
and promulgate rules for the administration and enforcement of the
levy and collection of such
fee
fees
.

(F)
As used in this section, "residential rental property" has
the same meaning as in section 5323.01 of the Revised Code.

Sec.
319.54.
(A)
On all moneys collected by the county treasurer on any tax duplicate
of the county, other than estate tax duplicates, on all property tax
relief reimbursements paid to the county under sections 323.156 and
4503.068 and divisions (F) and (I) of section 321.24 of the Revised
Code, and on all moneys received as advance payments of personal
property and classified property taxes, the county auditor, on
settlement with the treasurer and tax commissioner, on or before the
date prescribed by law for such settlement or any lawful extension of
such date, shall be allowed as compensation for the county auditor's
services the following percentages:

(1)
On the first one hundred thousand dollars, two and one-half per cent;

(2)
On the next two million dollars, eight thousand three hundred
eighteen ten-thousandths of one per cent;

(3)
On the next two million dollars, six thousand six hundred fifty-five
ten-thousandths of one per cent;

(4)
On all further sums, one thousand six hundred sixty-three
ten-thousandths of one per cent.

If
any settlement is not made on or before the date prescribed by law
for such settlement or any lawful extension of such date, the
aggregate compensation allowed to the auditor shall be reduced one
per cent for each day such settlement is delayed after the prescribed
date. No penalty shall apply if the auditor and treasurer grant all
requests for advances up to ninety per cent of the settlement
pursuant to section 321.34 of the Revised Code. The compensation
allowed in accordance with this section on settlements made before
the dates prescribed by law, or the reduced compensation allowed in
accordance with this section on settlements made after the date
prescribed by law or any lawful extension of such date, shall be
apportioned ratably by the auditor and deducted from the shares or
portions of the revenue payable to the state as well as to the
county, townships, municipal corporations, and school districts.

(B)
For the purpose of reimbursing county auditors for the expenses
associated with the increased number of applications for reductions
in real property taxes under sections 323.152 and 4503.065 of the
Revised Code that result from the amendment of those sections by Am.
Sub. H.B. 119 of the 127th general assembly, there shall be paid from
the state's general revenue fund to the county treasury, to the
credit of the real estate assessment fund created by section 325.31
of the Revised Code, an amount equal to one per cent of the total
annual amount of property tax relief reimbursement paid to that
county under sections 323.156 and 4503.068 of the Revised Code for
the preceding tax year. Payments made under this division shall be
made at the same times and in the same manner as payments made under
section 323.156 of the Revised Code.

(C)
From all moneys collected by the county treasurer on any tax
duplicate of the county, other than estate tax duplicates, on all
property tax relief reimbursements paid to the county under sections
323.156 and 4503.068 and divisions (F) and (I) of section 321.24 of
the Revised Code, and on all moneys received as advance payments of
personal property and classified property taxes, there shall be paid
into the county treasury to the credit of the real estate assessment
fund created by section 325.31 of the Revised Code, an amount to be
determined by the county auditor, which shall not exceed the
percentages prescribed in divisions (C)(1) and (2) of this section.

(1)
For payments made after June 30, 2007, and before 2011, the following
percentages:

(a)
On the first five hundred thousand dollars, four per cent;

(b)
On the next five million dollars, two per cent;

(c)
On the next five million dollars, one per cent;

(d)
On all further sums not exceeding one hundred fifty million dollars,
three-quarters of one per cent;

(e)
On amounts exceeding one hundred fifty million dollars, five hundred
eighty-five thousandths of one per cent.

(2)
For payments made in or after 2011, the following percentages:

(a)
On the first five hundred thousand dollars, four per cent;

(b)
On the next ten million dollars, two per cent;

(c)
On amounts exceeding ten million five hundred thousand dollars,
three-fourths of one per cent.

Such
compensation shall be apportioned ratably by the auditor and deducted
from the shares or portions of the revenue payable to the state as
well as to the county, townships, municipal corporations, and school
districts.

(D)
Each county auditor shall receive four per cent of the amount of tax
collected and paid into the county treasury, on property omitted and
placed by the county auditor on the tax duplicate.

(E)
On all estate tax moneys collected by the county treasurer, the
county auditor, on settlement annually with the tax commissioner,
shall be allowed, as compensation for the auditor's services under
Chapter 5731. of the Revised Code, two per cent of the amount
collected and reported that year in excess of refunds distributed,
for the use of the general fund of the county.

(F)
On all cigarette license moneys collected by the county treasurer,
the county auditor, on settlement semiannually with the treasurer,
shall be allowed as compensation for the auditor's services in the
issuing of such licenses one-half of one per cent of such moneys, to
be apportioned ratably and deducted from the shares of the revenue
payable to the county and subdivisions, for the use of the general
fund of the county.

(G)
The county auditor shall charge and receive fees as follows:

(1)
For deeds of land sold for taxes to be paid by the purchaser, five
dollars;

(2)
For the transfer or entry of land, lot, or part of lot, or the
transfer or entry on or after January 1, 2000, of a used manufactured
home or mobile home as defined in section 5739.0210 of the Revised
Code, fifty cents for each transfer or entry, to be paid by the
person requiring it;

(3)
For receiving statements of value and administering section 319.202
of the Revised Code, one dollar, or ten cents for each one hundred
dollars or fraction of one hundred dollars, whichever is greater, of
the value of the real property transferred or, for sales occurring on
or after January 1, 2000, the value of the used manufactured home or
used mobile home, as defined in section 5739.0210 of the Revised
Code, transferred, except no fee shall be charged when the transfer
is made:

(a)
To or from the United States, this state, or any instrumentality,
agency, or political subdivision of the United States or this state;

(b)
Solely in order to provide or release security for a debt or
obligation;

(c)
To confirm or correct a deed previously executed and recorded, or
when a current owner is changing the current owner name listed on any
record made available to the general public on the internet, or a
publicly accessible database, and the general tax list of real and
public utility property, and the general duplicate of real and public
utility property, to the initials of the current owner as prescribed
in division (C)(1) of section 319.28 of the Revised Code;

(d)
To evidence a gift, in trust or otherwise and whether revocable or
irrevocable, between husband and wife, or parent and child or the
spouse of either;

(e)
On sale for delinquent taxes or assessments;

(f)
Pursuant to court order, to the extent that such transfer is not the
result of a sale effected or completed pursuant to such order;

(g)
Pursuant to a reorganization of corporations or unincorporated
associations or pursuant to the dissolution of a corporation, to the
extent that the corporation conveys the property to a stockholder as
a distribution in kind of the corporation's assets in exchange for
the stockholder's shares in the dissolved corporation;

(h)
By a subsidiary corporation to its parent corporation for no
consideration, nominal consideration, or in sole consideration of the
cancellation or surrender of the subsidiary's stock;

(i)
By lease, whether or not it extends to mineral or mineral rights,
unless the lease is for a term of years renewable forever;

(j)
When the value of the real property or the manufactured or mobile
home or the value of the interest that is conveyed does not exceed
one hundred dollars;

(k)
Of an occupied residential property, including a manufactured or
mobile home, being transferred to the builder of a new residence or
to the dealer of a new manufactured or mobile home when the former
residence is traded as part of the consideration for the new
residence or new manufactured or mobile home;

(l)
To a grantee other than a dealer in real property or in manufactured
or mobile homes, solely for the purpose of, and as a step in, the
prompt sale of the real property or manufactured or mobile home to
others;

(m)
To or from a person when no money or other valuable and tangible
consideration readily convertible into money is paid or to be paid
for the real estate or manufactured or mobile home and the
transaction is not a gift;

(n)
Pursuant to division (B) of section 317.22 of the Revised Code, or
section 2113.61 of the Revised Code, between spouses or to a
surviving spouse pursuant to section 5302.17 of the Revised Code as
it existed prior to April 4, 1985, between persons pursuant to
section 5302.17 or 5302.18 of the Revised Code on or after April 4,
1985, to a person who is a surviving, survivorship tenant pursuant to
section 5302.17 of the Revised Code on or after April 4, 1985, or
pursuant to section 5309.45 of the Revised Code;

(o)
To a trustee acting on behalf of minor children of the deceased;

(p)
Of an easement or right-of-way when the value of the interest
conveyed does not exceed one thousand dollars;

(q)
Of property sold to a surviving spouse pursuant to section 2106.16 of
the Revised Code;

(r)
To or from an organization exempt from federal income taxation under
section 501(c)(3) of the "Internal Revenue Code of 1986,"
100 Stat. 2085, 26 U.S.C.A. 1, as amended, provided such transfer is
without consideration and is in furtherance of the charitable or
public purposes of such organization;

(s)
Among the heirs at law or devisees, including a surviving spouse, of
a common decedent, when no consideration in money is paid or to be
paid for the real property or manufactured or mobile home;

(t)
To a trustee of a trust, when the grantor of the trust has reserved
an unlimited power to revoke the trust;

(u)
To the grantor of a trust by a trustee of the trust, when the
transfer is made to the grantor pursuant to the exercise of the
grantor's power to revoke the trust or to withdraw trust assets;

(v)
To the beneficiaries of a trust if the fee was paid on the transfer
from the grantor of the trust to the trustee or if the transfer is
made pursuant to trust provisions which became irrevocable at the
death of the grantor;

(w)
To a corporation for incorporation into a sports facility constructed
pursuant to section 307.696 of the Revised Code;

(x)
Between persons pursuant to section 5302.18 of the Revised Code;

(y)
From a county land reutilization corporation organized under Chapter
1724. of the Revised Code, or its wholly owned subsidiary, to a third
party.

(4)
For the cost of publishing the delinquent manufactured home tax list,
the delinquent tax list, and the delinquent vacant land tax list, a
flat fee, as determined by the county auditor, to be charged to the
owner of a home on the delinquent manufactured home tax list or the
property owner of land on the delinquent tax list or the delinquent
vacant land tax list.

(5)
For the purpose of subsidizing college and university tuition, a fee
equal to one per cent of the value of the real property transferred
on or after the effective date of this amendment that is classified
as to use as residential property, provided that the value of the
property exceeds two million dollars. No such fee shall be charged
when the transfer is made under any of the circumstances described in
divisions (G)(3)(a) to (y) of this section.

(H)

The
auditor shall compute and collect the
fee
fees
.
The auditor shall maintain a numbered receipt system, as prescribed
by the tax commissioner, and use such receipt system to provide a
receipt to each person paying a fee. The auditor shall deposit the
receipts of the fees on conveyances in the county treasury daily to
the credit of the general fund of the county, except
that
fees
as
follows:

(1)
Fees
charged
and received under division (G)(3) of this section for a transfer of
real property to a county land reutilization corporation shall be
credited to the county land reutilization corporation fund
established under section 321.263 of the Revised Code
.

(2)
Fees charged and received under division (G)(5) of this section shall
be remitted to the treasurer of state and credited to the Ohio free
college fund created in section 3345.012 of the Revised Code
.

The
real property transfer fee provided for in division (G)(3) of this
section shall be applicable to any conveyance of real property
presented to the auditor on or after January 1, 1968, regardless of
its time of execution or delivery.

The
transfer fee for a used manufactured home or used mobile home shall
be computed by and paid to the county auditor of the county in which
the home is located immediately prior to the transfer.

Sec.
3345.012.
As
used in this section, "state institution of higher education"
has the same meaning as in section 3345.011 of the Revised Code.

Notwithstanding
any provision of law to the contrary, beginning with the academic
year immediately following the effective date of this section, no
state institution of higher education shall charge instructional,
general, or special fees to a student who is a resident of this state
under rules adopted under section 3333.31 of the Revised Code. Each
state institution shall provide a free higher education to any such
student it accepts for enrollment for the equivalent of eight
semesters.

The
chancellor of higher education shall develop a method to distribute
to state institutions annually the funds appropriated by the general
assembly to subsidize the costs incurred under this section.

The
Ohio free college fund is established in the state treasury,
consisting of such amounts designated for the purposes of the fund by
the general assembly. The fund shall be administered by the
chancellor and be used to distribute funds under this section. The
fund also may be used by the chancellor to cover the costs of
administering this section.

The
chancellor shall adopt rules to implement this section.

Sec.
5747.02.
(A)
For the purpose of providing revenue for the support of schools and
local government functions, to provide relief to property taxpayers,
to provide revenue for the general revenue fund, and to meet the
expenses of administering the tax levied by this chapter, there is
hereby levied on every individual, trust, and estate residing in or
earning or receiving income in this state, on every individual,
trust, and estate earning or receiving lottery winnings, prizes, or
awards pursuant to Chapter 3770. of the Revised Code, on every
individual, trust, and estate earning or receiving winnings on casino
or sports gaming, and on every individual, trust, and estate
otherwise having nexus with or in this state under the Constitution
of the United States, an annual tax measured as prescribed in
divisions (A)(1) to (4) of this section.

(1)
In the case of trusts, the tax imposed by this section shall be
measured by modified Ohio taxable income under division (D) of this
section and levied in the same amount as the tax is imposed on
estates as prescribed in division (A)(2) of this section.

(2)
In the case of estates, the tax imposed by this section shall be
measured by Ohio taxable income. The tax shall be levied at the rate
of 1.38462% for the first twenty-six thousand fifty dollars of such
income and, for income in excess of that amount, the tax shall be
levied at the same rates prescribed in division (A)(3) of this
section for individuals.

(3)
In the case of individuals, the tax imposed by this section on income
other than taxable business income shall be measured by Ohio adjusted
gross income, less taxable business income and less an exemption for
the taxpayer, the taxpayer's spouse, and each dependent as provided
in section 5747.025 of the Revised Code. If the balance thus obtained
is equal to or less than twenty-six thousand fifty dollars, no tax
shall be imposed on that balance. If the balance thus obtained is
greater than twenty-six thousand fifty dollars, the tax is hereby
levied as follows:

(a)
For taxable years beginning in 2023:

1

2

A

OHIO
ADJUSTED GROSS INCOME LESS TAXABLE BUSINESS INCOME AND EXEMPTIONS
(INDIVIDUALS) OR MODIFIED OHIO TAXABLE INCOME (TRUSTS) OR OHIO
TAXABLE INCOME (ESTATES)

TAX

B

More
than $26,050 but not more than $100,000

$360.69
plus 2.75% of the amount in excess of $26,050

C

More
than $100,000 but not more than $115,300

$2,394.32
plus 3.688% of the amount in excess of $100,000

D

More
than $115,300

$2,958.58
plus 3.75% of the amount in excess of $115,300

(b)
For taxable years beginning in 2024 and thereafter:

1

2

A

OHIO
ADJUSTED GROSS INCOME LESS TAXABLE BUSINESS INCOME AND EXEMPTIONS
(INDIVIDUALS) OR MODIFIED OHIO TAXABLE INCOME (TRUSTS) OR OHIO
TAXABLE INCOME (ESTATES)

TAX

B

More
than $26,050 but not more than $100,000

$360.69
plus 2.75% of the amount in excess of $26,050

C

More
than $100,000

$2,394.32
plus 3.5% of the amount in excess of $100,000

(4)(a)
In the case of individuals, the tax imposed by this section on
taxable business income shall equal three per cent of the result
obtained by subtracting any amount allowed under division (A)(4)(b)
of this section from the individual's taxable business income.

(b)
If the exemptions allowed to an individual under division (A)(3) of
this section exceed the taxpayer's Ohio adjusted gross income less
taxable business income, the excess shall be deducted from taxable
business income before computing the tax under division (A)(4)(a) of
this section.

(5)
Except as otherwise provided in this division, in August of each
year, the tax commissioner shall make a new adjustment to the income
amounts prescribed in divisions (A)(2) and (3) of this section by
multiplying the percentage increase in the gross domestic product
deflator computed that year under section 5747.025 of the Revised
Code by each of the income amounts resulting from the adjustment
under this division in the preceding year, adding the resulting
product to the corresponding income amount resulting from the
adjustment in the preceding year, and rounding the resulting sum to
the nearest multiple of fifty dollars. The tax commissioner also
shall recompute each of the tax dollar amounts to the extent
necessary to reflect the new adjustment of the income amounts. To
recompute the tax dollar amount corresponding to the lowest tax rate
in division (A)(3) of this section, the commissioner shall multiply
the tax rate prescribed in division (A)(2) of this section by the
income amount specified in that division and as adjusted according to
this paragraph. The rates of taxation shall not be adjusted.

The
adjusted amounts apply to taxable years beginning in the calendar
year in which the adjustments are made and to taxable years beginning
in each ensuing calendar year until a calendar year in which a new
adjustment is made pursuant to this division. The tax commissioner
shall not make a new adjustment in any year in which the amount
resulting from the adjustment would be less than the amount resulting
from the adjustment in the preceding year.

(B)
If the director of budget and management makes a certification to the
tax commissioner under division (B) of section 131.44 of the Revised
Code, the amount of tax as determined under divisions (A)(1) to (3)
of this section shall be reduced by the percentage prescribed in that
certification for taxable years beginning in the calendar year in
which that certification is made.

(C)(1)
The tax imposed by this section on a trust shall be computed by
multiplying the Ohio modified taxable income of the trust by the
rates prescribed by division (A) of this section.

(2)
A resident trust may claim a credit against the tax computed under
division (C) of this section equal to the lesser of (a) the tax paid
to another state or the District of Columbia on the resident trust's
modified nonbusiness income, other than the portion of the resident
trust's nonbusiness income that is qualifying investment income as
defined in section 5747.012 of the Revised Code, or (b) the effective
tax rate, based on modified Ohio taxable income, multiplied by the
resident trust's modified nonbusiness income other than the portion
of the resident trust's nonbusiness income that is qualifying
investment income. The credit applies before any other applicable
credits.

(3)
Any credit authorized against the tax imposed by this section applies
to a trust subject to division (C) of this section only if the trust
otherwise qualifies for the credit. To the extent that the trust
distributes income for the taxable year for which a credit is
available to the trust, the credit shall be shared by the trust and
its beneficiaries. The tax commissioner and the trust shall be guided
by applicable regulations of the United States treasury regarding the
sharing of credits.

(D)
For the purposes of this section, "trust" means any trust
described in Subchapter J of Chapter 1 of the Internal Revenue Code,
excluding trusts that are not irrevocable as defined in division
(I)(3)(b) of section 5747.01 of the Revised Code and that have no
modified Ohio taxable income for the taxable year, charitable
remainder trusts, qualified funeral trusts and preneed funeral
contract trusts established pursuant to sections 4717.31 to 4717.38
of the Revised Code that are not qualified funeral trusts, endowment
and perpetual care trusts, qualified settlement trusts and funds,
designated settlement trusts and funds, and trusts exempted from
taxation under section 501(a) of the Internal Revenue Code.

(E)
Nothing in division (A)(3) of this section shall prohibit an
individual with an Ohio adjusted gross income, less taxable business
income and exemptions, of twenty-six thousand fifty dollars or less
from filing a return under this chapter to receive a refund of taxes
withheld or to claim any refundable credit allowed under this
chapter.

(F)(1)
For the purpose of subsidizing college and university tuition, an
annual tax is levied on every individual, trust, and estate subject
to the tax levied under division (A) of this section that has a
modified adjusted gross income, less exemptions; modified Ohio
taxable income; or Ohio taxable income of more than five hundred
thousand dollars, as follows:

(a)
For taxable years beginning in 2025:

1

2

A

MODIFIED
ADJUSTED GROSS INCOME LESS EXEMPTIONS (INDIVIDUALS) OR MODIFIED
OHIO TAXABLE INCOME (TRUSTS) OR OHIO TAXABLE INCOME (ESTATES)

TAX

B

More
than $500,000 but not more than $1,000,000

5.375%
of the amount in excess of $500,000

C

More
than $1,000,000

$26,875
plus 7.375% of the amount in excess of $1,000,000

(b)
For taxable years beginning in 2026 or thereafter:

1

2

A

MODIFIED
ADJUSTED GROSS INCOME LESS EXEMPTIONS (INDIVIDUALS) OR MODIFIED
OHIO TAXABLE INCOME (TRUSTS) OR OHIO TAXABLE INCOME (ESTATES)

TAX

B

More
than $500,000 but not more than $1,000,000

5.75%
of the amount in excess of $500,000

C

More
than $1,000,000

$28,750
plus 7.5% of the amount in excess of $1,000,000

(2)
The tax levied under division (F) of this section shall be, for all
purposes, administered and enforced in the same manner and subject to
the same provisions as a tax levied under division (A) of this
section.

Sec.
5747.03.
(A)(1)
All money collected under this chapter arising from the taxes imposed
by section 5747.02, 5747.38, or 5747.41 of the Revised Code
,
except the tax levied under division (F) of section 5747.02 of the
Revised Code,

shall be credited to the general revenue fund and distributed
pursuant to division (F) of section 321.24 and section 323.156 of the
Revised Code; to make subsidy payments to institutions of higher
education from appropriations to the department of higher education;
to support expenditures for programs and services for persons with
mental illnesses, persons with developmental disabilities, and the
elderly; for primary and secondary education; for medical assistance;
and for any other purposes authorized by law, subject to the
limitation that at least fifty per cent of the income tax collected
by the state from the tax imposed by section 5747.02 of the Revised
Code shall be returned pursuant to Section 9 of Article XII, Ohio
Constitution.

(2)
To ensure that such constitutional requirement is satisfied the tax
commissioner shall, on or before the thirtieth day of June of each
year, from the best information available to the tax commissioner,
determine and certify for each county to the director of budget and
management the amount of taxes collected under this chapter from the
tax imposed under section 5747.02 of the Revised Code during the
preceding calendar year that are required to be returned to the
county by Section 9 of Article XII, Ohio Constitution. The director
shall provide for payment from the general revenue fund to the county
in the amount, if any, that the sum of the amount so certified for
that county exceeds the sum of the following:

(a)
The sum of the payments from the general revenue fund for the
preceding calendar year credited to the county's undivided income tax
fund pursuant to division (F) of section 321.24 and section 323.156
of the Revised Code or made directly from the general revenue fund to
political subdivisions located in the county;

(b)
The sum of the amounts from the general revenue fund distributed in
the county during the preceding calendar year for subsidy payments to
institutions of higher education from appropriations to the
department of higher education; for programs and services for persons
with mental illnesses, persons with developmental disabilities, and
elderly persons; for primary and secondary education; and for medical
assistance.

(c)
In the case of payments made by the director under this division in
2007, the total amount distributed to the county during the preceding
calendar year from the local government fund and the local government
revenue assistance fund, and, in the case of payments made by the
director under this division in subsequent calendar years, the amount
distributed to the county from the local government fund;

(d)
In the case of payments made by the director under this division, the
total amount distributed to the county during the preceding calendar
year from the public library fund.

Payments
under this division shall be credited to the county's undivided
income tax fund, except that, notwithstanding section 5705.14 of the
Revised Code, such payments may be transferred by the board of county
commissioners to the county general fund by resolution adopted with
the affirmative vote of two-thirds of the members thereof.

(B)
All payments received in each month from taxes imposed under Chapter
5748. of the Revised Code and any penalties or interest thereon shall
be paid into the school district income tax fund, which is hereby
created in the state treasury, except that an amount equal to the
following portion of such payments shall be paid into the general
school district income tax administrative fund, which is hereby
created in the state treasury:

(1)
One and three-quarters of one per cent of those received in fiscal
year 1996;

(2)
One and one-half per cent of those received in fiscal year 1997 and
thereafter.

Money
in the school district income tax administrative fund shall be used
by the tax commissioner to defray costs incurred in administering the
school district's income tax, including the cost of providing
employers with information regarding the rate of tax imposed by any
school district. Any moneys remaining in the fund after such use
shall be deposited in the school district income tax fund.

All
interest earned on moneys in the school district income tax fund
shall be credited to the fund.

(C)(1)(a)
Within thirty days of the end of each calendar quarter ending on the
last day of March, June, September, and December, the director of
budget and management shall make a payment from the school district
income tax fund to each school district for which school district
income tax revenue was received during that quarter. The amount of
the payment shall equal the balance in the school district's account
at the end of that quarter.

(b)
After a school district ceases to levy an income tax, the director of
budget and management shall adjust the payments under division
(C)(1)(a) of this section to retain sufficient money in the school
district's account to pay refunds. For the calendar quarters ending
on the last day of March and December of the calendar year following
the last calendar year the tax is levied, the director shall make the
payments in the amount required under division (C)(1)(a) of this
section. For the calendar quarter ending on the last day of June of
the calendar year following the last calendar year the tax is levied,
the director shall make a payment equal to nine-tenths of the balance
in the account at the end of that quarter. For the calendar quarter
ending on the last day of September of the calendar year following
the last calendar year the tax is levied, the director shall make no
payment. For the second and succeeding calendar years following the
last calendar year the tax is levied, the director shall make one
payment each year, within thirty days of the last day of June, in an
amount equal to the balance in the district's account on the last day
of June.

(2)
Moneys paid to a school district under this division shall be
deposited in its school district income tax fund. All interest earned
on moneys in the school district income tax fund shall be apportioned
by the tax commissioner pro rata among the school districts in the
proportions and at the times the districts are entitled to receive
payments under this division.

(D)
All revenue from the tax levied under division (F) of section 5747.02
of the Revised Code shall be credited to the Ohio free college fund
created in section 3345.012 of the Revised Code.

Sec.
5747.07.
(A)
As used in this section:

(1)
"Partial weekly withholding period" means a period during
which an employer directly, indirectly, or constructively pays
compensation to, or credits compensation to the benefit of, an
employee, and that consists of a consecutive Saturday, Sunday,
Monday, and Tuesday or a consecutive Wednesday, Thursday, and Friday.
There are two partial weekly withholding periods each week, except
that a partial weekly withholding period cannot extend from one
calendar year into the next calendar year; if the first day of
January falls on a day other than Saturday or Wednesday, the partial
weekly withholding period ends on the thirty-first day of December
and there are three partial weekly withholding periods during that
week.

(2)
"Undeposited taxes" means the taxes an employer is required
to deduct and withhold from an employee's compensation pursuant to
section 5747.06 of the Revised Code that have not been remitted to
the tax commissioner pursuant to this section or section 5747.072 of
the Revised Code.

(3)
A "week" begins on Saturday and concludes at the end of the
following Friday.

(4)
"Professional employer organization," "professional
employer organization agreement," and "professional
employer organization reporting entity" have the same meanings
as in section 4125.01 of the Revised Code.

(5)
"Alternate employer organization" and "alternate
employer organization agreement" have the same meanings as in
section 4133.01 of the Revised Code.

(6)
"Client employer" has the same meaning as in section
4125.01 of the Revised Code in the context of a professional employer
organization or a professional employer organization reporting
entity, or the same meaning as in section 4133.01 of the Revised Code
in the context of an alternate employer organization.

(B)
Except as provided in divisions (C) and (D) of this section and in
division (A) of section 5747.072 of the Revised Code, every employer
required to deduct and withhold any amount under section 5747.06 of
the Revised Code shall file a return and shall pay the amount
required by law as follows:

(1)
An employer who accumulates or is required to accumulate undeposited
taxes of one hundred thousand dollars or more during a partial weekly
withholding period shall make the payment of the undeposited taxes by
the close of the first banking day after the day on which the
accumulation reaches one hundred thousand dollars. If required under
division (I) of this section, the payment shall be made
electronically under section 5747.072 of the Revised Code.

(2)
Except as required by division (B)(1) of this section, an employer
whose actual or required payments under this section were at least
eighty-four thousand dollars during the twelve-month period ending on
the thirtieth day of June of the preceding calendar year shall make
the payment of undeposited taxes within three banking days after the
close of a partial weekly withholding period during which the
employer was required to deduct and withhold any amount under this
chapter. If required under division (I) of this section, the payment
shall be made electronically under section 5747.072 of the Revised
Code.

(3)
Except as required by divisions (B)(1) and (2) of this section, if an
employer's actual or required payments were more than two thousand
dollars during the twelve-month period ending on the thirtieth day of
June of the preceding calendar year, the employer shall make the
payment of undeposited taxes for each month during which they were
required to be withheld no later than fifteen days following the last
day of that month. The employer shall file the return prescribed by
the tax commissioner with the payment.

(4)
Except as required by divisions (B)(1), (2), and (3) of this section,
an employer shall make the payment of undeposited taxes for each
calendar quarter during which they were required to be withheld no
later than the last day of the month following the last day of March,
June, September, and December each year. The employer shall file the
return prescribed by the tax commissioner with the payment.

(C)
The return and payment schedules prescribed by divisions (B)(1) and
(2) of this section do not apply to the return and payment of
undeposited school district income taxes arising from taxes levied
pursuant to Chapter 5748. of the Revised Code. Undeposited school
district income taxes shall be returned and paid pursuant to
divisions (B)(3) and (4) of this section, as applicable.

(D)(1)
The requirements of division (B) of this section are met if the
amount paid is not less than ninety-five per cent of the actual tax
withheld or required to be withheld for the prior quarterly, monthly,
or partial weekly withholding period, and the underpayment is not due
to willful neglect. Any underpayment of withheld tax shall be paid
within thirty days of the date on which the withheld tax was due
without regard to division (D)(1) of this section. An employer
described in division (B)(1) or (2) of this section shall make the
payment electronically under section 5747.072 of the Revised Code.

(2)
If the tax commissioner believes that quarterly or monthly payments
would result in a delay that might jeopardize the remittance of
withholding payments, the commissioner may order that the payments be
made weekly, or more frequently if necessary, and the payments shall
be made no later than three banking days following the close of the
period for which the jeopardy order is made. An order requiring
weekly or more frequent payments shall be delivered to the employer
in the manner provided in section 5703.37 of the Revised Code and
remains in effect until the commissioner notifies the employer to the
contrary.

(3)
If compelling circumstances exist concerning the remittance of
undeposited taxes, the commissioner may order the employer to make
payments under any of the payment schedules under division (B) of
this section. The order shall be delivered to the employer in the
manner provided in section 5703.37 of the Revised Code and shall
remain in effect until the commissioner notifies the employer to the
contrary. For purposes of division (D)(3) of this section,
"compelling circumstances" exist if either or both of the
following are true:

(a)
Based upon annualization of payments made or required to be made
during the preceding calendar year and during the current calendar
year, the employer would be required for the next calendar year to
make payments under division (B)(2) of this section.

(b)
Based upon annualization of payments made or required to be made
during the current calendar year, the employer would be required for
the next calendar year to make payments under division (B)(2) of this
section.

(E)(1)
In addition to other returns required to be filed and payments
required to be made under this section, every employer required to
deduct and withhold taxes shall file, not later than the thirty-first
day of January of each year, an annual return covering, but not
limited to, both the aggregate amount deducted and withheld and the
aggregate amount required to be deducted and withheld during the
entire preceding year for the tax imposed under section 5747.02 of
the Revised Code and for each tax imposed under Chapter 5748. of the
Revised Code. At the time of filing that return, the employer shall
pay over any amounts of undeposited taxes for the preceding year,
whether actually deducted and withheld or required to be deducted and
withheld, that have not been previously paid. The employer shall make
the annual report, to each employee and to the tax commissioner, of
the compensation paid and each tax withheld, as the commissioner by
rule may prescribe.

(2)
Each employer required to deduct and withhold any tax is liable for
the payment of that amount required to be deducted and withheld,
whether or not the tax has in fact been withheld, unless the failure
to withhold was based upon the employer's good faith in reliance upon
the statement of the employee as to liability, and the amount shall
be deemed to be a special fund in trust for the general revenue fund.

(F)
Each employer shall file with the employer's annual return the
following items of information on employees for whom withholding is
required under section 5747.06 of the Revised Code:

(1)
The full name of each employee, the employee's address, the
employee's school district of residence, and in the case of a
nonresident employee, the employee's principal county of employment;

(2)
The social security number of each employee;

(3)
The total amount of compensation paid before any deductions to each
employee for the period for which the annual return is made;

(4)
The amount of the tax imposed by section 5747.02 of the Revised Code
and the amount of each tax imposed under Chapter 5748. of the Revised
Code withheld from the compensation of the employee for the period
for which the annual return is made. The commissioner may extend upon
good cause the period for filing any notice or return required to be
filed under this section and may adopt rules relating to extensions
of time. If the extension results in an extension of time for the
payment of the amounts withheld with respect to which the return is
filed, the employer shall pay, at the time the amount withheld is
paid, an amount of interest computed at the rate per annum prescribed
by section 5703.47 of the Revised Code on that amount withheld, from
the day that amount was originally required to be paid to the day of
actual payment or to the day an assessment is issued under section
5747.13 of the Revised Code, whichever occurs first.

(5)
In addition to all other interest charges and penalties imposed, all
amounts of taxes withheld or required to be withheld and remaining
unpaid after the day the amounts are required to be paid shall bear
interest from the date prescribed for payment at the rate per annum
prescribed by section 5703.47 of the Revised Code on the amount
unpaid, in addition to the amount withheld, until paid or until the
day an assessment is issued under section 5747.13 of the Revised
Code, whichever occurs first.

(G)
An employee of a corporation, limited liability company, or business
trust having control or supervision of or charged with the
responsibility of filing the report and making payment, or an
officer, member, manager, or trustee of a corporation, limited
liability company, or business trust who is responsible for the
execution of the corporation's, limited liability company's, or
business trust's fiscal responsibilities, shall be personally liable
for failure to file the report or pay the tax due as required by this
section. The dissolution, termination, or bankruptcy of a
corporation, limited liability company, or business trust does not
discharge a responsible officer's, member's, manager's, employee's,
or trustee's liability for a failure of the corporation, limited
liability company, or business trust to file returns or pay tax due.

(H)
If an employer required to deduct and withhold income tax from
compensation and to pay that tax to the state under sections 5747.06
and 5747.07 of the Revised Code sells the employer's business or
stock of merchandise or quits the employer's business, the taxes
required to be deducted and withheld and paid to the state pursuant
to those sections prior to that time, together with any interest and
penalties imposed on those taxes, become due and payable immediately,
and that person shall make a final return within fifteen days after
the date of selling or quitting business. The employer's successor
shall withhold a sufficient amount of the purchase money to cover the
amount of the taxes, interest, and penalties due and unpaid, until
the former owner produces a receipt from the tax commissioner showing
that the taxes, interest, and penalties have been paid or a
certificate indicating that no such taxes are due. If the purchaser
of the business or stock of merchandise fails to withhold purchase
money, the purchaser shall be personally liable for the payment of
the taxes, interest, and penalties accrued and unpaid during the
operation of the business by the former owner. If the amount of
taxes, interest, and penalties outstanding at the time of the
purchase exceeds the total purchase money, the tax commissioner in
the commissioner's discretion may adjust the liability of the seller
or the responsibility of the purchaser to pay that liability to
maximize the collection of withholding tax revenue.

(I)
An employer whose actual or required payments under this section
exceeded eighty-four thousand dollars during the twelve-month period
ending on the thirtieth day of June of the preceding calendar year
shall make all payments required by this section for the year
electronically under section 5747.072 of the Revised Code.

(J)(1)
Every professional employer organization, professional employer
organization reporting entity, and alternate employer organization
shall file a report with the tax commissioner within thirty days
after commencing business in this state that includes all of the
following information:

(a)
The name, address, number the employer receives from the secretary of
state to do business in this state, if applicable, and federal
employer identification number of each client employer of the
organization or entity;

(b)
The date that each client employer became a client of the
organization or entity;

(c)
The names and mailing addresses of the chief executive officer and
the chief financial officer of each client employer for taxation of
the client employer.

(2)
Beginning with the calendar quarter ending after a professional
employer organization, professional employer organization reporting
entity, or alternate employer organization files the report required
under division (J)(1) of this section, and every calendar quarter
thereafter, the organization or entity shall file an updated report
with the tax commissioner. The organization or entity shall file the
updated report not later than the last day of the month following the
end of the calendar quarter and shall include all of the following
information in the report:

(a)
If an entity became a client employer of the professional employer
organization, professional employer organization reporting entity, or
alternate employer organization at any time during the calendar
quarter, all of the information required under division (J)(1) of
this section for each new client employer;

(b)
If an entity terminated the professional employer organization
agreement or the alternate employer organization agreement between
the entity and the professional employer organization, professional
employer organization reporting entity, or alternate employer
organization, as applicable, at any time during the calendar quarter,
the information described in division (J)(1)(a) of this section for
that entity, the date during the calendar quarter that the entity
ceased being a client of the organization or reporting entity, if
applicable, or the date the entity ceased business operations in this
state, if applicable;

(c)
If the name or mailing address of the chief executive officer or the
chief financial officer of a client employer has changed since the
professional employer organization, professional employer
organization reporting entity, or alternate employer organization
previously submitted a report under division (J)(1) or (2) of this
section, the updated name or mailing address, or both, of the chief
executive officer or the chief financial officer, as applicable;

(d)
If none of the events described in divisions (J)(2)(a) to (c) of this
section occurred during the calendar quarter, a statement of that
fact.

(K)
For the purpose of subsidizing college and university tuition, a tax
is levied on each employer required to withhold and remit amounts
under this section and section 5747.06 of the Revised Code. The tax
shall equal one-half of one per cent of the amount of compensation in
excess of ten million dollars for the calendar year for which such
withholding and remission under this section is required. The tax
shall be paid by the employer at the same time and in the same manner
as withheld amounts are required to be paid under this section.
Except as otherwise provided in this division, the tax shall be
considered a tax levied under section 5747.02 of the Revised Code for
all purposes of this chapter. All revenue from the tax shall be
credited to the Ohio free college fund created in section 3345.012 of
the Revised Code.

Section
2.
That
existing sections 319.202, 319.54, 5747.02, 5747.03, and 5747.07 of
the Revised Code are hereby repealed.

Section
3.
The
amendment by this act of section 5747.02 of the Revised Code applies
to taxable years beginning on or after January 1, 2025.

Section
4.
The
General Assembly, applying the principle stated in division (B) of
section 1.52 of the Revised Code that amendments are to be harmonized
if reasonably capable of simultaneous operation, finds that the
following sections, presented in this act as composites of the
sections as amended by the acts indicated, are the resulting versions
of the sections in effect prior to the effective date of the sections
as presented in this act:

Section
319.54 of the Revised Code as amended by both H.B. 265 and H.B. 496
of the 135th General Assembly.

Section
5747.03 of the Revised Code as amended by H.B. 281 and S.B. 246 all
of the 134th General Assembly.