State of Ohio Tax Incentives
Ohio Job Creation Tax Credit: This is a very popular program for companies creating over 25 jobs as the result of making a new investment and where the project needs an incentive for this investment to be made in Ohio.
The Ohio Job Creation Tax Credit Program was established in 1993. The program provides a refundable tax credit against a company's corporate franchise or income tax based on the state income tax withheld from new, full-time employees. The Ohio Tax Credit Authority, a five-member independent board consisting of taxation and economic development professionals from throughout the state, is responsible for reviewing and approving applications for tax credit assistance and setting the benefit level. The Authority also has oversight responsibilities that include monitoring and reporting the progress of approved tax credit projects.
A refundable tax credit taken against a company's Commercial Activities Tax (CAT). The credit is awarded in a rate and a term based on the income tax withholdings of new employees. Rates typically range between 35-45% with terms ranging from 5-7 years. Should the amount of the credit be greater than the company's Commercial Activities Tax in any given year, the amount of the difference will be refunded.
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 Research and Development 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. This is not a refundable tax credit.
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.
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.
City of Troy Tax Incentives
Enterprise Zones: Provides real property tax incentives for businesses that expand or locate in Ohio (may provide personal property tax incentives for those qualifying businesses that continue to pay personal property tax). 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. Additional state franchise or state income tax incentives may be available through the Department of Development.
Up to 75% exemption in incorporated areas and up to 60% exemption in unincorporated areas on real property (or personal property, if applicable) for up to 10 years. Local school board approval is required to exceed this rate and/or term limits.
Industrial projects (retail/service projects are eligible in limited areas) 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.
Community Reinvestment Area Programs: A CRA is an area of land in which property owners can receive tax incentives for investing in real property improvements. The CRA Program is a direct incentive tax exemption program benefiting property owners who renovate existing or construct new buildings. The program permits the City of Troy to designate areas where investment has been discouraged as a CRA to encourage revitalization of the existing housing stock and the development of new structures.