Frequently Asked Questions

The Ohio Department of Taxation has compiled a list of frequently asked questions covering many different categories.

To view the questions, click on the "Select Category" bar and then click on the category you are interested in.  A list of questions will appear pertaining to that category. Then click on the question you are inquiring about and the answer will appear.

On Ohio forms IT 1140 (Sch. B) and IT 4708 (Sch. II), PTEs must add back the qualifying investors' shares of expenses and losses from transactions between the PTE and its related members. Please explain the reason for the add-back.

The law prevents a PTE’s having nexus with Ohio from stripping income from the state via large fees to related members having no nexus with Ohio.

An example of an inter-company transaction would be PTE Y having an Ohio apportionment ratio of 1.00000 and owning 75% of PTE X having no Ohio nexus (i.e. PTE X has an apportionment ratio of 0.0000. PTE X receives a $100,000 “management fee” from PTE Y. Without the add-back, PTE Y's Ohio taxable income would be reduced by $100,000, and the $100,000 would not be taxable to Ohio in the hands of PTE X.

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