These grant funds are for on or off site infrastructure improvements, including water, sewer, road and rail improvements. This fund is for companies primarily engaged in manufacturing, R&D high technology, corporate headquarters, and distribution. Given the demand for limited grant funds, qualified projects must involve substantial job creation of retention, and all other public and private sources of financing must be considered before that availability of 412 funding is determined
Direct Loan financing between $1 million and $25 million is available for projects primarily engaging in research and development activity. Rates are fixed (currently at 3 percent), with terms similar to those of commercial bank financing. Companies receive a dollar-for-dollar, nonrefundable Ohio corporate franchise (income) tax credit for all principle and interest payments during the year.
The R&D investment Tax Credit is a non-refundable Ohio corporate franchise (income) tax credit for all investments in qualified research expenses incurred in Ohio by eligible "C" corporations. Qualified research expenses are based on Section 41 definitions in the U.S. Internal Revenue Code and include expenses for both in-house and contract research expenses. The amount of the credit is based on 7 percent of the amount of all qualified investment in a specific year. For companies with a presence in Ohio, the eligible investment in R&D expenses is based on all investment exceeding the company's three-year annual average investment in the country. The credit can be carried forward for up to seven years.
The Job Creation Tax credit is a refundable Ohio corporate franchise (income) tax available to Companies creating at least 25 new full-time jobs (within 3 years) in Ohio. The credit may also be available for certain high-wage industries creating 10 or more new full-time jobs within 3 years. The credit is measured as a percentage of the state income tax withholdings for all new employees hired under the program. Approved projects generally range between 55 and 65 percent for a period of 6 to 8 years. The business must apply for the credit before committing to the project.
The Job Retention Tax Credit is a non-refundable Ohio Corporate franchise (income) tax available to companies retaining at least 1,000 full-time jobs in Ohio. Companies must also commit to new fixed-asset investment of either $100 million, if the average wages of retained jobs exceeds 400 percent of the federal minimum wage (equal to $20.60 per hour), or $200 million, if the average wages of the retained jobs does not exceed 400 percent of the federal minimum wage. The credit is measured as a percentage of the state income tax withholdings for all employees retained under the program. Approved projects generally range up to 75 percent for 10 years. The business must apply the credit before committing to the project.
State and local sales taxes are exempted on certain types of purchases, including machinery and equipment used in the manufacturing process; material handling equipment used in the warehousing of inventory that is primarily (51 percent or greater) distributed to retail operations associated with the warehouse operator; and equipment used for research and development purposes. Additionally, inventory, which is taxed at the local level as tangible personal property, can be exempt from tax if located in an established Foreign Trade Zone. Inventory is also exempt from taxation if qualified for the Warehouse Inventory Tax Exemption, whereby inventory that is received from outside Ohio, held "for storage only" (i.e. no value is added to the inventory while stored in Ohio), and distributed outside Ohio, is completely exempted from local tangible personal property tax.
Community Reinvestment Areas are areas of land in which property owners can receive tax incentives for investing in real property improvements. The Community Reinvestment Area (CRA) Program is a direct incentive tax exemption program benefiting property owners who renovate existing or construct new buildings. This program permits municipalities or counties 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.
Enterprise Zones are designated areas of land in which businesses can receive tax incentives in the form of tax exemptions on eligible new investments. Enterprise Zones are not part of the traditional zoning program -- which limits the use of land -- instead they allow local officials to negotiate with businesses to encourage new business investment in the zone. Enterprise Zones serve as an additional economic development tool for communities attempting to retain and expand their economic base. Because of the far-reaching effects of tax incentives, the Enterprise Zone should be used as a tool of the last resort. A community should attempt to satisfy the business's needs through other assistance programs prior to considering tax incentives. In all cases, Enterprise Zone Agreements should be negotiated cautiously.
The Ohio Investment in Training Program (OITP) provides grants for training expenses directly to Ohio companies when companies make investments, which result in the creation or retention of jobs. OITP generally focuses on manufacturing companies, but also provides training funding and support for non-manufacturing companies such as distribution, information technology, and financial service operations which could otherwise be located outside of Ohio. OITP provides reimbursement for up to 50% of eligible training costs of a defined training program. Eligible training costs include payments for instructor costs, training materials, travel and other related training expenses with matching funds being provided by the participating company.
The Roadwork Development (629) Account grant funds are available for public roadway improvements, including engineering and design costs. This fund is available for projects primarily involving manufacturing, R&D, high technology, corporate headquarters, and distribution activity. Projects must typically create or retain jobs. Grants are usually provided to the local jurisdiction and require local participation.
Tax Increment Financing (TIF) is an economic development mechanism available to local governments in Ohio to finance public infrastructure improvements and, in certain circumstances, residential rehabilitation. A TIF works by locking in the taxable worth of real property at the value it holds at the time the authorizing legislation was approved. Payments derived from the increased assessed value of any improvement to real property beyond that amount are directed towards a separate fund to finance the construction of public infrastructure defined within the TIF legislation.
TIF Parcel Guidelines
TIF Incentive Districts Guidelines
TIF Implementation Process