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.

What is business vs. nonbusiness income?

“Business income” means income, including gain/loss from any of the following:

  • Transactions, activities, and sources in the regular course of a trade or business operation.
  • From real, tangible, and intangible property if the acquisition, rental, management, and disposition of the property constitute integral parts of the regular course of a trade or business operation.
  • From a partial or complete liquidation of a business, including gain or loss from the sale or other disposition of goodwill.
  • Compensation and guaranteed payments paid by a pass-through entity, or a professional employer organization (PEO) on its behalf, to an investor who directly or indirectly owns 20% or more of the entity.

Business income could include income from a sole proprietorship, farming, or a pass-through entity (including any partnership, S Corporation, or LLC).

“Nonbusiness Income” means income that is not business income. This generally includes:

  • Compensation and guaranteed payments;
  • Rents and royalties;
  • Interest, dividends and capital gains;

See R.C. 5747.01(B), (C) and 5733.40(A)(7).

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