FAQs - Pass Through Entity

Why can't PTEs owned by nonresident individuals who file and pay the Ohio IT 1040 provide a written statement agreeing they have nexus and are in compliance; thus exempting them from filing the IT 1140 much like corporations can?

The current law does not provide for this type of exemption for the PTE even if all the out-of-state individual investors are currently filing the Ohio form IT 1040. Please note Ohio Revised Code Section (R.C.) 5733.41 provides that if all the investors in a pass-through entity are (i) corporations subject to the Ohio Corporation franchise tax or subject to the franchise phase-out and or (ii) corporations that would be subject to the tax if not exempt (R.C). 5733.09, then the pass-through entity is exempt from the withholding and entity tax.