Tax Rules: Final: 5703-29
5703-29-21 Pre-income tax trusts, explained with
revocation procedures.
(A) Subject to paragraph (D) of this rule, each pre-income
tax trust making a qualifying pre-income tax trust election
pursuant to division (FF)(3) of section 5747.01 of the
Revised Code must register for the commercial activity tax
imposed under section 5751.02 of the Revised Code by April
17, 2007. In addition, all such trusts must file tax returns
for tax years 2006 and 2007 and pay at least a minimum tax of
one hundred fifty dollars for each year, regardless of the
trust's taxable gross receipts. This is required pursuant to
the last sentence of division (E)(11) of section 5751.01 of
the Revised Code that states in pertinent part "If the
pre-income tax trust has made a qualifying pre-income tax
trust election under division (FF)(3) of section 5747.01 of
the Revised Code, then the trust * * * shall not be [an]
excluded [person] for purposes of the tax imposed under
section 5751.02 of the Revised Code."
(B) A "pre-income tax trust" is a trust that meets all of the
following requirements under division (FF)(4) of section
5747.01 of the Revised Code: (1) the document creating the
trust was executed prior to January 1, 1972; (2) the trust
became irrevocable upon creation; and (3) the grantor was
domiciled in Ohio when the trust was created.
(C) A "qualified pre-income tax trust" is a "pre-income tax
trust", as that term is defined in division (FF)(4) of
section 5747.01 of the Revised Code and paragraph (B) of this
rule, that made an election pursuant to division (FF)(3) of
section 5747.01 of the Revised Code prior to April 17, 2006.
The deadline of April 15, 2006 specified in division (FF)(3)
of section 5747.01 of the Revised Code was extended to
coincide with section 1.14 of the Revised Code that addresses
due dates of certain documents filed with the state that fall
on a weekend or legal holiday.
(D)(1) If the trustee of a qualified pre-income tax trust
wishes to revoke the trust's election, the trustee must do so
prior to the due date for the minimum tax for the current
calendar year as provided for in division (A)(5) of section
5751.051 of the Revised Code. Such revocation is irrevocable
and shall apply to the full taxable year for which the
revocation is timely made.
(2) The trustee of a trust revoking its election must file a
personal income tax return for the trust for taxable year
2006 (due to be filed in 2007) and make all corresponding
payments by April 17, 2007 in order to avoid the imposition
of penalties. For all future tax periods, a trustee of a
trust revoking its election must file all applicable personal
income tax returns and make all corresponding payments by the
fifteenth day of the fourth month following the end of the
tax period, unless extended by a weekend or legal holiday.
(3) The trustee of a trust revoking an election may receive a
letter acknowledging the revocation. Such letter does not
signify that the trust meets the definition of a pre-income
tax trust for purposes of the commercial activity tax.
Therefore, even though a trust revoked its election, it may
remain subject to both the personal income tax and the
commercial activity tax if it is later found not to be a
pre-income tax trust.
(E) If a qualified pre-income tax trust would otherwise be
the common owner of either a combined taxpayer group or a
consolidated elected taxpayer group, and the trust has less
than four thousand five hundred dollars in taxable gross
receipts, such trust is not required to register for the
commercial activity tax pursuant to paragraph (B)(2) of rule
5703-29-02 of the Administrative Code. However, in the case
of a qualified pre-income tax trust that is not a common
owner of either a combined taxpayer group or a consolidated
elected taxpayer group, such trust must be registered for the
commercial activity tax and must file all applicable returns,
regardless of its taxable gross receipts.
Effective: 1-14-08
Promulgated under: 5703.14
Authorized by: 5703.05
Amplifies: 5747.01, 5747.01(FF)(4), 5751.02
Prior effective dates: 5-10-07