Program Description

Rate/Terms

Benefits

Eligibility

Contact/
Phone #

Ohio Job Creation Tax Credit
Provides corporate franchise or state income tax credit for businesses that expand or locate in Ohio for companies that incur tax liability under ORC Sections 5733.06 or 5747.02. Program will provide a tax credit against the Commercial Activity Tax (CAT) beginning on July 1, 2008.Insurance companies that pay the annual franchise tax under ORC Sections 5725.18/5729.03 are eligible for the tax credit beginning July 1, 2005.

Ohio Tax Credit Authority determines eligibility and terms
Business must demonstrate to the Authority that the tax credit is a major factor in its decision to go forward with the project
Local community must also provide financial support for the project

Refundable state franchise or income tax credits that minimize expenditures to encourage business expansion and/or location projects in Ohio
The tax credit will apply against the corporate franchise tax through 6/30/08, and transfer to cover the Commercial Activity Tax (CAT) liabilities for tax period beginning July 1, 2008. The program will continue to be refundable.

Businesses that create at least 25 net new full-time positions at a facility in Ohio and pay a minimum of 150% of federal minimum wage
In special circumstances, a company could create as few as 10 new full-time positions paying at least 400% of the federal minimum wage

Office of Tax Incentives
(614) 466-2317
or
(800) 848-1300

Ohio Job Retention Tax Credit
Provides corporate franchise or state income tax credit for businesses that commit to retain a significant number of full-time jobs. Program will provide a tax credit against the Commercial Activity Tax (CAT) beginning on July 1, 2008.

Ohio Tax Credit Authority determines eligibility and terms
Credits awarded to companies that are engaged at the project site primarily as a manufacturer or providing significant corporate administrative functions and can demonstrate the tax credit is a major factor in its decision to retain jobs in Ohio
Local community must also provide financial support for the project.

Nonrefundable corporate franchise or state income tax credits for corporations, partnerships, limited liability companies and other pass-through entities to minimize the costs of maintaining an operation in the state. The tax credit will transfer to cover the Commercial Activity Tax (CAT) liabilities for tax period beginning July 1, 2008. The program will continue to be non-refundable.

Businesses that currently employ at least 1,000 full-time employees and make a capital asset investment of at least $200 million
In special circumstances, a company could invest at least $100 million if the retained positions pay, and will continue to pay, at least 400% of the federal minimum wage.

Office of Tax Incentives
(614) 466-2317
or
(800) 848-1300

Ohio Research and Development Investment Tax Credit
Provides a nonrefundable tax credit against the corporate franchise tax and is designed to encourage Ohio’s corporations to invest in increased research and development activities.

The credit equals 7% of the excess amount of Qualified Research Expenses.

Nonrefundable tax credit.
The tax credit currently is applied against a company’s corporate franchise tax. The tax credit will transfer to cover the Commercial Activity Tax (CAT) for corporations subject to ORC Section 5733.01(G)(2) after tax year 2008.
Any excess credit not used in the taxable year in which it is earned by be carried forward for up to 7 years.

Only those taxpayers subject to the franchise tax provision of ORC Section 5733.06, or those subject to division (G)(2) of section 5733.01 under CAT tax are eligible for the credit.
Taxpayer must invest in “Qualified Research Expenses”, defined within Section 41 of the Internal Revenue Code and includes both in-house research expenses (wages and supplies) and contract research expenses.
New investment in a taxable year must exceed business' annual average investment in Qualifying Research Expenses for the tree previous taxable years.

Office of Tax Incentives
(614) 466-2317
or
(800) 848-1300

Training Tax Credit
Provides tax credits for employers that train existing employees who are at risk of losing their jobs primarily due to skill deficiencies.

$20 million in credits available annually with no single business receiving more than $100,000 per year
Tax credit available in tax year 2004, 2005, and 2006.

Nonrefundable tax credits to help businesses offset costs of training incumbent workers and improving the business' competitive position

Businesses must conduct an eligible training program to correct identified skill deficiencies in its existing workforce
Training for management personnel is generally prohibited

Department of Job and Family Services
(614) 644-7104

Ohio Manufacturing Machinery & Equipment Grant/Ohio Manufacturing Machinery & Equipment Investment Tax Credit
Provides a nonrefundable corporate franchise or state income tax credit for manufacturer located in Ohio that purchases qualified new or retooled machinery and equipment that is used in manufacturing.
As of July 1, 2005, the M&E Equipment Grant replaced the M&E Investment Tax Credit as the mechanism for companies to take the incentive. The M&E Equipment Investment Grant Program incentive values are calculated in the same manner at the M&E Investment Tax Credit, and therefore the annual incentive amounts previously calculated through the tax credit program will apply to the grant program. The M&E Equipment Grant program will require companies /individuals intending on taking the incentive (again – the same amounts as the annual values calculated through the M&E Investment Tax Credit program on the Notice of Intents) must file a grant request form with their tax return.

Manufacturer receives a 7.5% tax credit on the excess investment, credit of 13.5% is available in "priority investment areas"
Total value of credit is divided equally over 7 years and manufacturer is permitted to carry forward any unused credit for up to 3 years
Purchases must be made by June 30, 2005 and installation must occur before June 30, 2006.
Credit exceeding $1 million must meet special requirements
Notice of Intents must still be filed with ODOD for investment made in calendar years 1995 through 6/30/05. A company’s deadline to file a Notice of Intent for any investment year is determined by the required filing date of its tax return (see the M&E Investment Credit website under “Notice of Intent Due Dates” for the deadlines).

Substantial state franchise or income tax reductions which minimize capital expenditures to encourage business expansions and locations in Ohio
For state franchise tax filers, the incentive is applicable to the corporate franchise tax credit during the tax’s phase out period. After the tax is eliminated, the incentive is eliminated.
For state income tax filers, the incentive can be taken against the state income tax until the term of the incentive is completed.

Corporations, partnerships, limited liability companies or proprietorships
New investment must exceed business' annual average county investment in machinery and equipment determined by the filing year
Machinery and equipment must be new to Ohio Retooling qualifies if costs are capitalized for federal tax depreciation purposes

Office of Tax Incentives
(614) 466-2317
or
(800) 848-1300

Technology Investment Tax Credit
Offers a variety of benefits to Ohio taxpayers who invest in small, research and development and technology-oriented forms.

Provides a tax credit for taxpayers that invest in small, Ohio-based technology companies. The amount of the tax credit is 25% (or 30% in some limited cases) of the amount invested by the taxpayer. The maximum investment to which this credit may be applied is $250,000 (or $300,000). The credit may be claimed against personal income tax, corporate franchise tax, public utility excise tax or the dealers in intangibles tax.

To be eligible, the company must have its principal place of business located in Ohio and must also have less than $2.5 million in revenue or less than $2.5 million in net assets for the most recently completed fiscal year. Finally, the entity must be engaged in a business that primarily involves R&D and/or technology transfer.

Investors may reduce their state taxes by up to 25% of amount invested

Businesses primarily focused on research and development, technology
transfer, or the application of a new technology Business must have gross revenues less than $1 million, or net book value of less than $1 million, at the end of most recent fiscal year
Principal place of business and 1/2 of its gross assets and employees must be in Ohio Business must have received less than $1 million in investments that have qualified for the tax credit

Technology Division
(614) 466-3887
or
(800) 848-1300
or
Ohio's Thomas Edison Program

Research and Development Sales Tax Exemption

Provides an exemption from the usual state and county sales tax for companies that purchase equipment for research and development activities. Vendor needs a blanket exemption certificate, available on-line at the Department of Taxation’s website

(http://tax.ohio.gov/)
under Business, Tax Forms.

Exempts business from entire state and county sales tax for purchases of machinery and equipment used primarily for research and development

Provides significant tax savings for companies undertaking research and development activities in Ohio

Includes research and development activity in both direct and pure research
Direct research refers to research conducted to design, create or formulate new or better products, equipment or processes
Pure research refers to scientific or technological inquiry and experimentation in the physical sciences

Ohio Department of Taxation, Sales Tax Division
(614) 466-7351
or
(888) 405-4039

Manufacturing Machinery & Equipment Sales Tax Exemption

Provides an exemption from state and county sales tax for companies that purchase machinery and equipment for manufacturing activities. Vendor needs a blanket exemption certificate, available on-line at the Department of Taxation’s website (http://tax.ohio.gov/) under Business, Tax Forms

Exempts business from entire state and county sales tax for purchases of machinery and equipment used primarily for manufacturing

Provides significant tax savings for companies and individuals that are involved in manufacturing in Ohio

Includes machinery, equipment, supplies and fuel used primarily in a manufacturing operation to produce tangible personal property for sales

Ohio Department of Taxation, Sales Tax Division
(614) 466-7351
or
(888) 405-4039

Warehouse Machinery & Equipment Sales Tax Exemption

Provides an exemption from state and county sales tax for companies that purchase eligible warehousing equipment. Vendor needs a blanket exemption certificate, available on-line at the Department of Taxation’s website (http://tax.ohio.gov/) under Business, Tax Forms

Exempts business from entire state and county sales tax for purchases of eligible machinery and equipment

Provides significant tax savings for companies purchasing machinery and equipment for warehousing, distribution and direct marketing activities

Includes machinery and equipment used primarily (51%) in storing, transporting, mailing or handling inventory in a warehouse, distribution center or similar facility if the inventory handled by the facility is primarily distributed outside Ohio to retail stores owned by the business or affiliated group that owns the Ohio facility or distributed by means of direct marketing

Ohio Department of Taxation, Sales Tax Division
(614) 466-7351
or
(888) 405-4039

Warehouse Inventory Tax Exemption

Provides an exemption from the personal property tax on qualifying inventory. Claimed as part of the Personal Property Tax return.

Current rate is 0%

Significant tax savings for companies that have substantial amounts of inventory
This exemption will only be applicable as long as there is tangible personal property tax is assessed on inventory. Once the personal property tax is eliminated, the exemption is eliminated.

Inventory brought into Ohio from out of state, held for storage only with no further processing and then distributed back outside of the state, will be subject to a reduced personal tangible property assessment rate “Held for Storage Only" is a specific standard of eligibility that may preclude the value of some inventory being shipped directly to customers from qualifying for the reduced assessment rate

Ohio Department of Taxation, Personal Property Tax Division
(614) 466-3280

Enterprise Zones

Provides real and personal property tax incentives for businesses that expand or locate in Ohio. In order to apply, the municipality or county must apply to the State Development Director for certification. To secure benefits, non-retail businesses must apply to the local community for local property tax exemptions and to the State Development Director for state franchise or state income tax incentives.

Up to 75% exemption in incorporated areas and up to 60% exemption in unincorporated areas on real property improvements or tangible personal property tax valuation for up to 10 years
Local school board approval is required to exceed these rate and/or term limits

Substantial tax reductions on new real and/or personal property investment
Reductions apply to the increase in assessed value for real property and items first-used by the business in Ohio for personal property
Note that: 1) manufacturing machinery and equipment new to the state purchased after 1/1/05 will not be taxed and 2) once personal property tax is phased out, the personal property tax incentive will no longer be applicable.

Industrial projects (retail/service projects are eligible in limited areas)
Business must finalize agreement to retain or create employment; establish expand, renovate or occupy a facility in an Enterprise Zone; and invest in new real and/or personal property prior to project initiation

Office of Tax Incentives
(614) 466-2317
or
(800) 848-1300

Community Reinvestment Areas

Provides local real-property tax incentives for residents and businesses that invest in designated areas of Ohio. In order to apply, the municipality or county must apply to the State Development Director for confirmation. Investors meeting the local criteria must apply to the municipality or county for the real property tax exemption.

Up to 100% exemption of the improved real property tax valuation for up to 15 years depending on the project
Local legislative authority establishes rates and terms
In some instances, local school board approval may be required

Substantial real estate property tax reduction for new real property

Real property investment incentives are available for residential, commercial, and/or industrial projects involving remodeling or new construction
Commercial and industrial projects must have an agreement in place prior to investment
Local legislative authority establishes project eligibility

Office of Tax Incentives
(614) 466-2317
or
(800) 848-1300

Loan/Grant Description

Rate/Terms

Benefits

Eligibility

Contact/
Phone #

Ohio Enterprise Bond Fund

Provides loans for land and building acquisition, construction, expansion or renovation and equipment purchases for eligible businesses. 

Long-term, fixed rate for up to 20 years;
Interest rate based on Standard & Poor's AA-minus rating, for up to 90% of total project amount.

Access to national capital markets for unrated companies
May not require third-party credit enhancement

Must show repayment and management capabilities. Must be able to document job creation or retentionOhio prevailing wage rate applies

Office of Financial Incentives (614) 466-5420 or (800) 848-1300

Volume Cap Program
Federally authorized programs providing authority to issue tax-exempt bonds for select private (non-governmental) activities

Project funding is awarded to sections 122-4-01 to 122-4-08 OAC.

Authorizes bond issuers with ability to finance projects at interest rates below that of the conventional market

Must involve mortgage loans to low-income home buyers, student loans, construction or improvement of certain types of manufacturing facilities, solid waste treatment equipment or pollution abatement facilities, or multifamily rental housing development or renovation. 

Office of Financial Incentives (614) 466-5420 or (800) 848-1300

166 Direct Loan
Provides loans for land and building acquisition, expansion or renovation, and equipment purchase.

Up to 30% of total eligible fixed cost ($350,000 - $1 million);
Two-thirds of prime fixed rate for 5-15 years;
Equity minimum 10%;
In distressed areas of the state, preferential rates and terms are available;
State Development Director may authorize a higher loan amount or modified rate and terms that address a unique and demonstrated economic development need.

Rate, Term, and Availablility

Must show repayment and management capabilities; Must create or retain 1 job for every $15,000 received or $35,000 in Priority Investment Areas Ohio prevailing wage rate applies.

Financial Incentives (614) 466-5420 or (800) 848-1300

Regional 166 Direct Loan
Provides loans for land and building acquisition, construction, expansion or renovation and equipment purchases for eligible businesses. Twelve local economic development agencies administer the program.

Up to 40% of total eligible fixed cost ($350,000 maximum);
Rate negotiable for 5-15 years;
Equity minimum 10%;
State Controlling Board approval required.

Low fixed rate; Long term availability for smaller projects

Must show repayment and management capabilities;Must create or retain 1 job for every $35,000 received; Ohio prevailing wage rate applies.

Office of Financial Incentives (614) 466-5420 or (800) 848-1300

Innovation Ohio Loan Fund Program
The IOF can finance up to 75 percent of a project’s qualifying costs through loans in the range of $500,000 to $3 million.

Fund Guidelines PDF click here

While loan terms will be individually negotiated, interest rates will be prime (as of proposal submission deadline) +2% and the loan term will be in the range of 4-7 years.  Additional fees will bring the total cost of funds to an effective rate of 8% to 12%.

Provides financial resources for product commercialization for leading technology companies

Allowable costs include the acquisition, construction, renovation or improvement of facilities, and the acquisition and installation of equipment for innovative projects that create new products and services.

Office of Financial Incentives (614) 466-5420 or (800) 848-1300

Research & Development Investment Loan Fund Program
The Research and Development Investment Loan Fund (R&D Fund) was created to promote economic development, business expansion and job creation by encouraging private-sector R&D investments. The R&D Fund provides assistance in the form of a low-interest loan, partnered with a tax credit.

Businesses that are meeting the program requirements (i.e. job creation commitments, timely loan repayments, commitment to R&D activities, etc.) will be eligible for a dollar-for-dollar credit against their Ohio tax liability, equal to the amount of principal and interest repaid on the loan. The maximum annual credit is $150,000.

Incentivizes Ohio companies to make new investments in Research and Development activities.

Eligible projects are defined as those in which research is undertaken for the purpose of discovering and developing new or improved products, processes, techniques, formulas or inventions.

Office of Financial Incentives (614) 466-5420 or (800) 848-1300