| TAX INCENTIVES
TAX INCREMENT
FINANCING
Allows a business's real property tax to
be used to finance a public infrastructure improvement that directly benefits its place of
operations.
Business/Project: Permits service payments in lieu of real property
taxes to be used to finance public infrastructure improvements connected to an improvement
declared to have a "public purpose." Local legislative authorities use this
program at their discretion.
Rate/Terms: Up to 100% of value or real property taxes can be
exempted for up to 10 years depending on location. However, an annual service payment in
lieu of taxes cannot exceed the annual debt service of the notes or bonds used to finance
the public infrastructure improvements.
Eligibility: Counties, municipalities or townships must, by
resolution or ordinance, declare improvements to a parcel of real property located within
its jurisdiction to be a public purpose.
For more information contact:
Mayor's Office of Economic Development (330) 375- 2133
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MANUFACTURER’S
INVESTMENT TAX CREDIT
(Machinery and Equipment Tax Credit)
Encourages expansion of existing
operations and supports additional investment into the state.
Business/Project: A non-refundable corporate franchise income
tax credit for a company that purchases new or retools qualified machinery and equipment
that is located in Ohio and is used for manufacturing.
Rate/Terms: The Company shall receive a 7.5% tax credit on a
company's machinery and equipment investment. A tax credit of 13.5% is available to
companies making investments in the Priority Investment Area and includes all land zoned
business, industrial or commercial in the City of Akron. The manufacturing machinery and
equipment tax credit would be divided equally over 7 years, and the company is permitted
to carry forward any unused tax credit amount for up to three years.
Eligibility: The credit is based on the amount of the investment
in excess of the company's average investment in a county during the previous three years.
Equipment must be new to Ohio or be a retooling of current manufacturing equipment. Only
value added from re-tooling is eligible. A company must file Notice of Intent to
claim the credit each year. If the anticipated credit exceeds $1 million, special
requirements apply.
For more information
contact:
Governor’s Office of Economic Development (330) 643-3392
State of Ohio (614)
466-2317
Office of Tax Incentives
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JOB CREATION TAX
CREDIT
Substantial state tax
reductions, which minimize capital expenditure to encourage business expansions and
locations in Ohio.
Business/Project: State tax incentives
for businesses that expand or locate in Ohio. State guidelines regulate the type of
business and project eligible for service.
Rate/Terms: A business can receive a
refundable tax credit against its corporate franchise/income tax based on the state income
tax withheld on new, full-time employees. The amount of the tax credit can be up to 75%
for up to 10 years. The tax credit can exceed 75% only upon recommendation of the Director
that there is an extraordinary circumstance that merits exception. Approved projects
generally range between 50% to 60% for 5 to 10 years.
Eligibility: A five-member authority
determines eligibility and terms. Businesses must agree to create at least 25 new,
full-time jobs within 3 years of operation. The average wage of all employees must be at
least 150% of the current federal minimum wage. The businesses must demonstrate to the
state that the tax credit is a major factor in its decision to go forward with the
project. The local community must also provide financial support for the project.
For more information contact:
Governor’s Office of Economic Development, (330) 643-3392
State of Ohio
Office of Tax Incentives: (614) 466-2317
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EXPORT TAX CREDIT
Encourages and rewards the efforts of Ohio
businesses who export their products or services into the international marketplace.
Business/Project: A non-refundable franchise tax credit for
corporate or individual taxpayers who increase export sales, if they also increase either
Ohio payroll or Ohio capital expenditures.
Rate/Terms: The credit is based on the average increase in
export sales during the two years prior to the year in which the credit is claimed. Export
sales are defined as those sales that qualify for special Foreign Sales Corporation (FSC)
federal tax treatment.
Eligibility: Generally, a business is able to claim a 10% credit
of pre-tax profit from increase in export sales, as long as either Ohio payroll or
property values increase by 10% over the previous three years. If the increase is less
than 10%, the credit is proportionately reduced.
For more information
contact:
Governor’s Office of Economic Development (330) 643-3392
Governor's Export
Initiative (614) 466-5017
Ohio Department of Taxation (614) 846-6712
Corporate Taxpayers (614) 433-7617
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RESEARCH
AND DEVELOPMENT TAX CREDIT
Ohio Companies receive financial incentives
to produce and perfect the technologies and products of the future.
Business/Project: A sales tax exemption for machinery and
equipment used in research and development.
Eligibility: Applies only to equipment, and the equipment must
be used in qualified research and development activities. Qualified research includes
"pure" research (scientific or technological inquiry and experimentation in the
physical sciences) and "directed" research (research conducted to design, create
or formulate new or better products, equipment or manufacturing processes).
For more information
contact:
Governor’s Office of Economic Development, (330) 643-3392
Ohio Dept. of Development, Technology Division (614) 466-3086
Ohio Department of Taxation (614) 466-4810
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BROWNFIELDS TAX CREDIT
Intended to encourage the private sector
remediation and reuse of properties, which are considered environmentally contaminated.
Business/Project: The Brownfield Site Clean-up Tax Credit
Program may provide a taxpayer, a state franchise or income tax credit for voluntary
remediation of a contaminated Ohio site.
Rate/Terms: The level of tax credit is 10% of eligible costs or
$500,000, whichever is less. In designated eligible areas of the state, the level of the
tax credit is 15% of the eligible costs or $750,000, whichever is less.
Eligibility: The tax credit is available only to those
companies, which have participated in the Ohio Environmental Protection Agency's Voluntary
Action Program and have received and maintained a "Covenant Not to Sue" from the
OEPA Director. The Director of the Ohio Department of Development will determine whether
the Brownfield Site Cleanup Tax Credit is appropriate.
For more information
contact:
Governor’s Office of Economic Development, (330) 643-3392
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WORKING
OPPORTUNITY TAX CREDIT
A federal income tax credit that encourages
employers to hire seven targeted groups of job seekers.
Business/Project: WOTC is one of several incentives, in this case a
tax incentive, provided in order to encourage economic revitalization of certain
distressed and rural areas. Nine empowerment zones and 95 enterprise communities have been
identified. Akron is designated as an Enterprise Community.
Rates/Terms: There are seven target groups that may qualify employers
for tax credits up to $2,400 (40% of the new hires 1st years salary up to $6,000). New
Hires must work at least 400 hours to qualify for the 40% tax credit. New hires working
less than 400 hours but more than 120 hours may qualify employers for a 25% tax credit up
to $1,500. Employers hiring summer youth ages 16&17 residing in Akron’s
Enterprise Community may also qualify for tax credits of 40% up to a maximum of $1,200.
Target Groups/Eligibility: 1) TANF recipient—A member of a family
receiving or recently receiving Temporary Assistance for Needy Families. 2) Food Stamp
Recipient—an 18-24 year old member of a family that is receiving or has recently
received Food Stamps. 3) An 18-24 year old residing in Akron’s Enterprise Community
(16 & 17 year old Enterprise Community Residents for summer) 4) Veteran—who is a
member of a family that has received assistance under a food stamp program for 3 of the
past 15 months from hire. 5) Vocational Rehabilitation Referral—A disabled person
referred by US. Dept. of Veteran Affairs or the Ohio Rehabilitation Services Commission.
6) Ex-Felon. 7) Supplemental Security Income (SSI) Recipient.
Welfare To Work Tax Credit
Long-Term Welfare Recipients may qualify employers for a two-year tax
credit. Tax credits may be for up 35% of the new hires 1st year wages and 50%
for their second year wages. Qualified wages are capped at $10,000 per year. Wages include
tax-exempt amounts received under accident or health plans, as well as educational
assistance and dependent assistance programs. Long-Term Welfare Recipients must be
designated by the local Department of Job and Family Services.
For more information
contact:
Ohio Department of Jobs and Family Services (614) 644-7206
Governor’s Office of Economic Development (330) 643-3392
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OHIO
TRAINING TAX CREDIT PROGRAM
(OTTC)
Benefits employers who may
receive tax credits to offset the costs of training current employees.
Business/Project: The Ohio Training Tax Credit Program
(OTTC) will provide a wide range of selected Ohio employers with a tax credit of up to
$100,000 a year to help offset the costs of training current workers.
Rate/Terms: Credits may be used to pay for training
materials, travel and wages of trainer and trainees.
Eligibility: Contact the Ohio
Department of Jobs and Family Services for more information.
For more information contact:
Governor’s Office of Economic Development (330) 643-3392
Ohio Department of Jobs and Family Services (614) 644-7206
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