FAQs - Corporation Franchise Tax

What is the difference between business and nonbusiness income?

For taxable years ending on or after June 26, 2003, Ohio franchise tax law distinguishes business income from nonbusiness income and defines those terms as follows:

  • “Business income means income arising from transactions, activities, and sources in the regular course of a trade or business and includes income from real property, tangible personal property, and intangible personal property if the acquisition, rental, management, and disposition of the property constitute integral parts of the regular course of a trade or business operation. “Business income” includes income, including gain or loss, from a partial or complete liquidation of a business, including, but not limited to, gain or loss from the sale or other disposition of goodwill.” R.C. 5733.041(Q).
  • “Nonbusiness income means all income other than business income.” R.C. 5733.04(R).