Ohio Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.

We were recently asked about credits and incentives in Ohio. I was able to speak with some Ohio economic development professionals and learned some of their details (JobsOhio site click here).

Ohio offers a variety of tax credits and abatements, grants and low-interest financing along with technical assistance programs that are available to both new and existing businesses.  CNBC ranked Ohio #28 for the cost of doing business in their 2013 America’s Top States for Business survey.

Incentives and credits include:

Job Creation Tax Credit – A refundable tax credit to companies creating at least 10 new jobs (within three years) and at least $660,000 additional payroll in Ohio. 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. 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.

Research and Development Investment Tax Credit – The R&D Investment Tax Credit is a non-refundable tax credit up to 7 percent for qualified research and development expenses. Any unused portion of a tax credit may be carried forward for up to seven years.

Ohio Incumbent Workforce Training Voucher – training vouchers worth up to $4,000 per employee per year, up to $250,000 per employer.  Application and approval required up front, limited amounts available per year.

Compared to Georgia, Ohio has:

  • Similar corporate and personal income tax rates, which means that state tax credits are beneficial to business owners.
  • far narrower range of incentives.
  • Pre-approvals required for incentives

To summarize, Ohio is not as competitive as Georgia for business tax incentives.  Their Midwest location could provide advantages, depending on logistical needs.

Do any of your clients have Ohio connections?  If so, start planning early.  JobsOhio industry experts will be happy to help.

DaleSig