Section 5747.221. Items of income and deductions not to be allocated or apportioned to Ohio

(A) As used in this section, "investment pass-through entity" has the same meaning as in section 5733.401 of the Revised Code.

(B) Except as provided in division (C) of this section, for the purposes of sections 5747.20, 5747.21, and 5747.22 of the Revised Code, no item of income or deduction shall be allocated or apportioned to this state to the extent that such item represents the portion of an adjusted qualifying amount for which the withholding tax is not imposed under section 5747.41 of the Revised Code by reason of division (C) of section 5733.401 of the Revised Code. This section shall be applied without regard to division (I) of section 5733.40 of the Revised Code.

(C) If a taxpayer has a direct or indirect investment in an investment pass-through entity that has a direct or indirect investment in any other pass-through entity, division (B) of this section does not apply to any item of income, gain, deduction, or loss where, under section 5747.231 of the Revised Code, the item is directly or indirectly attributable to either of the following:

(1) A distributive share of income or gain from a pass-through entity that does not qualify as an investment pass-through entity;

(2) A pass-through entity's income or gain to which division (C) of section 5733.401 of the Revised Code does not apply.

An indirect investment includes any interest that a person constructively owns on account of the attribution rules set forth in section 267, 318, or 1563 of the Internal Revenue Code.

Effective Date: 09-05-2001