STATE TAX CREDITS AND ABATEMENTS
- Job Creation Tax Credit
The Job Creation Tax Credit is a refundable tax credit given to companies who create at least 10 new jobs (within three years) with a minimum annual payroll of $660,000 that pay at least 150 percent of the federal minimum wage. The tax credit is measured as a percentage of the state income tax withholdings for all new employees hired under the program, and is applied toward the company’s commercial activity tax liability. Should the amount of the credit exceed the company’s commercial activity tax liability for any given year, the difference is refunded. A business must apply for the credit before committing to the project. Applicants must be approved through the Ohio Tax Credit Authority before hiring begins.
- Ohio Enterprise Zone Program
The Ohio Enterprise Zone Program provides real property tax incentives for businesses that expand or relocate in Ohio. To establish an Enterprise Zone, a municipality or county must apply to the Director of Development for certification. To secure benefits, businesses must apply to the local community. Certain qualifying businesses may be eligible for additional benefits.
- Community Reinvestment Areas
A Community Reinvestment Area provides companies locating in a designated Community Reinvestment Area an exemption of up to 100 percent of improvement value for up to 15 years on real property taxes. To be eligible, a company must make an agreement with the local community prior to going forward with the qualifying project (Area Specific: Belpre, downtown Marietta and Beverly).
- Tax Increment Financing
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. TIFs are implemented at the local level and may be created by a township, municipality or county. There are two types of TIF structures available - general purpose/parcel TIFs or incentive district TIFs.
Local jurisdictions seeking to establish a TIF project must enact legislation that (a) designates the parcel(s) to be exempted from taxation, (b) declares improvements to private property within the specified area as serving a public purpose, (c) delineates the public infrastructure improvements to be made that will directly benefit the parcel and (d) specifies the equivalent funds to be created for those redirected monies. Only those public infrastructure improvements directly serving the increased demand arising from the real property improvements to the parcel(s) or an Incentive District are eligible for TIF financing.