Ohio Tax Credits & Incentives
Whether you are a company considering expanding to a new location, a developer planning your next project or a municipality looking to attract new businesses, KJK can help you identify, negotiate, procure and comply with the right tax credits and incentives available at the local, state and federal level to help your real estate development project or business growth opportunity move forward.
Important to Consider:
How KJK Can Help
Our experienced team has in-depth knowledge and experience securing local, state and federal incentives. We can assist in creating an incentive procurement strategy that meets the needs of your project or growth opportunity. Tax credits and incentives are available through meeting statutory requirements or by negotiating discretionary support from approving entities at the state and local levels. Examples of the same are as follows:
Federal, state and local programs exist to encourage investment in certain geographic areas or in certain types of buildings or land. Most location-based incentives target attracting investment into economically distressed areas. KJK has experience structuring location-based tax credits and incentives such as:
- Opportunity Zone (OZ) Investments
- Historic Tax Credits
- New Market Tax Credits
- Brownfield/Vacant Property Incentives
KJK can assist in structuring an OZ investment.
Many of the aforementioned programs have complex tax structuring and statutory requirements; however, they can provide subsidies between 20-45% of your project value. KJK can help assess what location-based incentives provide the most value to close the financing gap on your project and develop an approach for doing so.
Job Creation/Retention Incentives
States and local governments often have grants or tax credits that grant an employer a certain percentage of new payroll and/or income tax generated from new employees/new payroll to the jurisdiction. For example, Ohio’s flagship incentive, the Ohio Job Creation Tax Credit (Ohio JCTC) provides a refundable credit against Ohio’s commercial activity tax (CAT) for a negotiated rate and term. Qualifying projects must create at least $660,000 of new payroll and create 10 new jobs over a 3-year term. Subject to a variety of negotiating factors, most credits are between 1-2% of payroll and have an average term of 5-7 years.
Additional programs exist to offset the cost of capital expenditures (such as investment in machinery and equipment, or the cost of workforce development and training). Some, but not all, require negotiation through establishing a competitive justification for support such as:
- JobsOhio’s Economic Development Grant
- JobsOhio’s Workforce Training Grant
Other sources of support related to job creation and retention do not require a negotiation, but compliance with program guidelines such as:
- On-the-Job Training Assistance through Ohio Means Jobs (local workforce investment boards)
- OhioTech Cred
Job creation- and retention-based credits have guidelines regarding measuring employment, calculating payroll and related issues. KJK can assist in understanding these requirements to determine if these types of incentives add value to your growth opportunity.
Property Tax, Energy & Assessment Incentives
States and local communities normally provide incentives to offset the increase in real property taxes when companies or developers make larger investments in new construction or existing building renovations. In Ohio, to receive a tax abatement on the increased value of property taxes assessed as a result of an investment in new construction or building renovation, properties must be located in a designated Community Reinvestment Area or Enterprise Zone. Tax abatements often require approval of both the local legislative authority as well as the local school district.
In addition to, or lieu of a tax abatement, real estate development projects also can be financed through the use of Tax Increment Financing (TIF). Instead of not paying all or a portion of increased real property taxes through an abatement, a TIF redirects paid property taxes back to the project to pay for public infrastructure or, in some cases, private investment in urban areas. The TIF payment can either go directly to the property owner or be used to leverage debt, typically through a bond issuance, to provide up-front capital to a project.
Finally, there is a growing trend in Ohio for the use of PACE (Property Assessed Clean Energy) financing in Ohio. PACE will finance approximately 20-25% of project costs provided that the project contains certain energy efficiency related benefits as demonstrated through an energy audit. The PACE loan is repaid through a special assessment placed on the property.
Property Tax Abatements, TIFs and PACE financing can help close large gaps in project financing; however, all require careful negotiation to structure each program to provide the largest value to your project.
We have Experience:
We have a long history of helping clients expand successfully. In 2015-2016, we helped Dealer Tire build its world headquarters at the historic, century-old Victory Center in Cleveland.
The owner of the Victory Center was facing bankruptcy and came to us for help. Using our community connections, we helped Dealer Tire and the building owner connect. After reviewing the $12 million public incentive package that included state, county and city incentives, the two parties agreed on a deal in January 2016, with Dealer Tire becoming the sole occupant of the Victory Center until 2026.
We’re Here for you:
Grow your business with KJK
Call us today to arrange a consultation and learn how KJK can help your business expand with Ohio’s economic incentives.