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Businesses / Industry >> Strategic Business Investment Business Incentives Tax Credits Program Description Rate/Terms Benefits Eligibility Contact/ Ohio Job Creation Tax Credit Refundable state franchise or income tax credits that minimize expenditures to encourage business expansion and/or location projects in Ohio 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 Office of Tax Incentives Ohio Tax Credit Authority determines eligibility and terms Businesses that currently employ at least 1,000 full-time employees and make a capital asset investment of at least $200 million Office of Tax Incentives Nonrefundable tax credit. 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. Office of Tax Incentives $20 million in credits available annually with no single business receiving more than $100,000 per year Businesses must conduct an eligible training program to correct identified skill deficiencies in its existing workforce Department of Job and Family Services Ohio Manufacturing Machinery & Equipment Grant/Ohio Manufacturing Machinery & Equipment Investment Tax Credit Manufacturer receives a 7.5% tax credit on the excess investment, credit of 13.5% is available in "priority investment areas" Substantial state franchise or income tax reductions which minimize capital expenditures to encourage business expansions and locations in Ohio Corporations, partnerships, limited liability companies or proprietorships Office of Tax Incentives Technology Investment Tax Credit 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. Businesses primarily focused on research and development, technology Technology Division Includes research and development activity in both direct and pure research Ohio Department of Taxation, Sales Tax Division Ohio Department of Taxation, Sales Tax Division Ohio Department of Taxation, Sales Tax Division Significant tax savings for companies that have substantial amounts of inventory Ohio Department of Taxation, Personal Property Tax Division Enterprise Zones 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 Substantial tax reductions on new real and/or personal property investment Industrial projects (retail/service projects are eligible in limited areas) Office of Tax Incentives Ohio Historic Preservation Tax Credit. Office of Urban Development (614) 644-6552 or (614) 995-2292. Up to 100% exemption of the improved real property tax valuation for up to 15 years depending on the project Real property investment incentives are available for residential, commercial, and/or industrial projects involving remodeling or new construction Office of Tax Incentives
Phone #
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
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.
In special circumstances, a company could create as few as 10 new full-time positions paying at least 400% of the federal minimum wage
(614) 466-2317
or
(800) 848-1300Ohio Job Retention Tax Credit (pdf 93k)
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.
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.
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.
(614) 466-2317
or
(800) 848-1300Ohio Research and Development Investment Tax Credit (pdf 14k)
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.
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.
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.
(614) 466-2317
or
(800) 848-1300Training Tax Credit
Provides tax credits for employers that train existing employees who are at risk of losing their jobs primarily due to skill deficiencies.
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
Training for management personnel is generally prohibited
(614) 644-7104
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.
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).
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.
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
(614) 466-2317
or
(800) 848-1300
Offers a variety of benefits to Ohio taxpayers who invest in small, research and development and technology-oriented forms.Investors may reduce their state taxes by up to 25% of amount invested
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
(614) 466-3887
or
(800) 848-1300
or
Ohio's Thomas Edison ProgramResearch 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
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
(614) 466-7351
or
(888) 405-4039Manufacturing 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 FormsExempts 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
(614) 466-7351
or
(888) 405-4039Warehouse 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
(614) 466-7351
or
(888) 405-4039Warehouse 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%
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
(614) 466-3280
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.
Local school board approval is required to exceed these rate and/or term limits
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.
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
(614) 466-2317
or
(800) 848-1300
Provides a refundable tax credit to the owner of a historic building. The credit is based upon expenses paid by the owner to rehabilitate the historic building.The credit is equal to 25% of the qualified rehabilitation expenditures paid to rehabilitate the historic building. The refundable tax credit can be claimed against the building owner's individual income tax, corporate franchise tax, or dealers-in-intangibles tax liability. Only building owners that are subject to any of the taxes against which the credit can be applied are eligible for the credit. An application for the credit must be submitted to the e Ohio Historic Preservation Officer and to the Director of the Ohio Department of Development. Not more than 100 applications can be approved per year of a two-year period that begins on July 1, 2007. 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.
Local legislative authority establishes rates and terms
In some instances, local school board approval may be requiredSubstantial real estate property tax reduction for new real property
Commercial and industrial projects must have an agreement in place prior to investment
Local legislative authority establishes project eligibility
(614) 466-2317
or
(800) 848-1300
© 2006 State of Ohio Department of Development
