Tax Data Series

Corporation Franchise Tax

Corporate Franchise Tax: Number of Corporations and Reported Tax Liability, by Tax Base and Industry, Tax Year 2012

Tax year 2010 was the final year of a five-year phase-out of the corporate franchise tax for most corporations. The phase-out was enacted in 2005 under landmark Ohio tax reform legislation (Am. Sub. House Bill 66, 126th General Assembly). For most corporations, there was no franchise tax beginning in tax year 2010. However, the following types of corporations continue to be subject to the franchise tax: banks and other financial institutions (who remain subject to the 13-mill net worth tax reflected in Table CF-5); certain affiliates of financial institutions that are engaged in financial institution-related activities; certain affiliates of insurance companies that are engaged in insurance-type activities; and securitization companies.

The attached tables reflect non-financial institution taxpayers that remain subject to the corporate franchise tax. Their total tax liability before tax credits and litter tax was $24.2 million. Total non-refundable and refundable tax credits were $33.8 million. Tax liability after credits and litter tax was $-9.3 million. There were a total of 1,069 such corporations, with 127 of them paying the tax based on net income and 202 paying the tax based on net worth. The number of corporations paying the $50 or $1,000 minimum tax amounted to 740.

Tables CF-1A and 1B show the number of corporations and the reported total tax liabilities by tax base for each of five industrial sectors, and an “all other” category.

Tables CF-2A and 2B categorize the corporate returns by the size of the reported tax liability per return. The number of corporations and total tax liability are shown for each of the alternative tax bases for nine tax liability classes. Returns reporting over $500,000 in tax liability were responsible for approximately 50 percent of the total reported liability before tax credits and litter tax.

The data shown on these tables were compiled from returns (form FT-1120) filed for tax year 2012 with the Ohio Department of Taxation.

NOTE: These tables do not include data from the tax returns of financial institutions. Data from financial institution returns are shown on a separate table (CF-5).