As Introduced

136th General Assembly

Regular Session S. B. No. 284

2025-2026

To amend sections 5747.15 and 5751.06 and to enact section 5739.125 of the Revised Code to waive penalties for taxpayers that do not file certain tax returns because no tax is due.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 5747.15 and 5751.06 be amended and section 5739.125 of the Revised Code be enacted to read as follows:

Sec. 5739.125. Notwithstanding any other provision of this chapter or Chapter 5741. of the Revised Code, the tax commissioner shall not impose any penalty or interest under either chapter or take any action otherwise authorized under section 5739.30 of the Revised Code for the failure to file a return if no amount of tax is due with the return.

Sec. 5747.15. (A) In addition to any other penalty imposed by this chapter or Chapter 5703. of the Revised Code, the following penalties shall apply:

(1) If a taxpayer, a qualifying entity, an electing pass-through entity, or an employer required to file any report or return, including an informational notice, report, or return, under this chapter fails to make and file the report or return within the time prescribed, including any extensions of time granted by the tax commissioner, a penalty may be imposed not exceeding the greater of fifty dollars per month or fraction of a month, not to exceed five hundred dollars, or five per cent per month or fraction of a month, not to exceed fifty per cent, of the sum of the taxes required to be shown on the report or return, for each month or fraction of a month elapsing between the due date, including extensions of the due date, and the date on which filed.

(2) If a taxpayer fails to pay any amount of tax required to be paid under section 5733.41 or Chapters 5747. or 5748. of the Revised Code, except estimated tax under section 5747.09 or 5747.43 of the Revised Code, by the dates prescribed for payment, a penalty may be imposed not exceeding twice the applicable interest charged under division (G) of section 5747.08 of the Revised Code for the delinquent payment.

(3)(a) If an employer fails to pay any amount of tax imposed by section 5747.02 of the Revised Code and required to be paid under this chapter by the dates prescribed for payment, a penalty may be imposed not exceeding the sum of ten per cent of the delinquent payment plus twice the interest charged under division (F)(5) of section 5747.07 of the Revised Code for the delinquent payment.

(b) If a qualifying entity or an electing pass-through entity fails to pay any amount of tax imposed by section 5733.41, 5747.38, or 5747.41 of the Revised Code and required to be paid under this chapter by the dates prescribed for payment, a penalty may be imposed not exceeding the sum of ten per cent of the delinquent payment plus twice the applicable interest charged under division (G) of section 5747.08 of the Revised Code for the delinquent payment.

(4)(a) If an employer withholds from employees the tax imposed by section 5747.02 of the Revised Code and fails to remit the tax withheld to the state as required by this chapter on or before the dates prescribed for payment, a penalty may be imposed not exceeding fifty per cent of the delinquent payment.

(b) If a qualifying entity withholds any amount of tax imposed under section 5747.41 of the Revised Code from an individual's qualifying amount and fails to remit that amount to the state as required by sections 5747.42 to 5747.453 of the Revised Code on or before the dates prescribed for payment, a penalty may be imposed not exceeding fifty per cent of the delinquent payment.

(5) If a taxpayer, a qualifying entity, an electing pass-through entity, or an employer files what purports to be a return required by this chapter that does not contain information upon which the substantial correctness of the return may be judged or contains information that on its face indicates that the return is substantially incorrect, and the filing of the return in that manner is due to a position that is frivolous or a desire that is apparent from the return to delay or impede the administration of the tax levied by section 5733.41, 5747.02, 5747.38, or 5747.41, or Chapter 5748. of the Revised Code, a penalty of up to five hundred dollars may be imposed.

(6) If a taxpayer, a qualifying entity, or an electing pass-through entity makes a fraudulent attempt to evade the reporting or payment of the tax required to be shown on any return required under this chapter, a penalty may be imposed not exceeding the greater of one thousand dollars or one hundred per cent of the tax required to be shown on the return.

(7) If any person makes a false or fraudulent claim for a refund under this chapter, a penalty may be imposed not exceeding the greater of one thousand dollars or one hundred per cent of the claim. The penalty imposed under division (A)(7) of this section, any refund issued on the claim, and interest on any refund from the date of the refund, may be assessed under section 5747.13 of the Revised Code as tax, penalty, or interest imposed under section 5733.41, 5747.02, 5747.38, or 5747.41 of the Revised Code, without regard to whether the person making the claim is otherwise subject to the provisions of this chapter or Chapter 5733. of the Revised Code, and without regard to any time limitation for the assessment imposed by division (A) of section 5747.13 of the Revised Code.

(B) For purposes of this section, the taxes required to be shown on the return shall be reduced by the amount of any part of the taxes paid on or before the date, including any extensions of the date, prescribed for filing the return.

(C) Any penalty imposed under this section shall be in addition to all other penalties imposed under this section. All or part of any penalty imposed under this section may be abated by the commissioner. All or part of any penalty imposed under this section may be abated by the commissioner if the taxpayer, qualifying entity, electing pass-through entity, or employer shows that the failure to comply with the provisions of this chapter is due to reasonable cause and not willful neglect.

(D) Notwithstanding any other provision of this section or chapter, the tax commissioner shall not impose any penalty or interest under this chapter for the failure to file a return or report if no amount of tax is due with the return or report.

Sec. 5751.06. (A) Any taxpayer that fails to file a return or pay the full amount of the tax due within the period prescribed therefor under this chapter shall pay a penalty in an amount not exceeding the greater of fifty dollars or ten per cent of the tax required to be paid for the tax period.

(B)(1) If any additional tax is found to be due, the tax commissioner may impose an additional penalty of up to fifteen per cent on the additional tax found to be due.

(2) Any delinquent payments of the tax made after a taxpayer is notified of an audit or a tax discrepancy by the commissioner is subject to the penalty imposed by division (B) of this section. If an assessment is issued under section 5751.09 of the Revised Code in connection with such delinquent payments, the payments shall be credited to the assessment.

(C) If the tax commissioner notifies a person required to register under section 5751.05 of the Revised Code of such requirement and of the requirement to remit the tax due under this chapter, and the person fails to so register and remit the tax within sixty days after such notice, the tax commissioner may impose an additional penalty of up to thirty-five per cent of the tax due. The penalty imposed under this division is in addition to any other penalties imposed under this section.

(D) The tax commissioner may collect any penalty or interest imposed by this section in the same manner as the tax imposed under this chapter. Penalties and interest so collected shall be considered as revenue arising from the tax imposed under this chapter.

(E) The tax commissioner may abate all or a portion of any penalties imposed under this section and may adopt rules governing such abatements.

(F) If any tax due is not timely paid in accordance with this chapter, the taxpayer shall pay interest, calculated at the rate per annum prescribed by section 5703.47 of the Revised Code, from the date the tax payment was due to the date of payment or to the date an assessment was issued, whichever occurs first.

(G) The tax commissioner may impose a penalty of up to ten per cent for any additional tax that is due under division (B)(2) of section 5751.051 of the Revised Code from a taxpayer incorrectly reporting its taxable gross receipts.

(H) If the tax commissioner discovers that a taxpayer has billed or invoiced another person for the tax imposed under this chapter in violation of division (B) of section 5751.02 of the Revised Code, the tax commissioner shall notify the taxpayer of the violation in the manner provided in section 5703.37 of the Revised Code and may impose a penalty of up to five hundred dollars. If the taxpayer subsequently bills or invoices a person for the tax imposed under this chapter, the tax commissioner shall impose a penalty of five hundred dollars.

(I) Notwithstanding any other provision of this section or chapter, the tax commissioner shall not impose any penalty or interest under this chapter for the failure to file a return if no amount of tax is due with the return.

Section 2. That existing sections 5747.15 and 5751.06 of the Revised Code are hereby repealed.

Section 3. The amendment or enactment by this act of sections 5739.125, 5774.15, and 5751.06 of the Revised Code applies to returns or reports required to be filed on or after the effective date of that amendment or enactment.