ARE S CORPORATION NONRESIDENT SHAREHOLDERS SUBJECT TO THE OHIO INDIVIDUAL INCOME TAX?
Yes. For taxable years ending after December 31, 1985, any nonresident individual or nonresident estate whose federal taxable income includes a distributive share from an S corporation is subject to the Ohio individual income tax and must file if any of the following circumstances apply: • The S corporation was incorporated in Ohio for any portion of the period to which the distributive share relates, or • The S corporation owned or used a part or all of its capital or property in Ohio for any portion of the period to which the distributive share relates, or • The S corporation did business in Ohio for any portion of the period to which the distributive share relates, or • The S corporation held a certificate of compliance for any day within the period to which the distributive share relates. However, Federal Public Law 86-272 may protect some nonresidents from the Ohio individual income tax if the S corporation’s Ohio activities do not exceed the activities protected by Public Law 86-
