Ohio New Markets Tax Credits

The Ohio New Markets Tax Credit Program is designed to leverage the highly successful and innovative Federal New Markets Tax Credit Program by offering state tax credits to attract additional federal tax credits and private investments in Ohio businesses. This Program will help finance business investments in low-income communities by providing investors with state tax credits in exchange for delivering below-market-rate investment options to Ohio businesses.

As private credit markets have struggled, financial mechanisms like New Markets Tax Credits have become increasingly important for businesses that need access to capital.

Low-income communities (LIC) are census tracts that have a poverty rate of 20 percent or more, or the median income is below 80 percent of the greater than (a) statewide median income or (b) metropolitan median income.

Community Development Entities (CDEs) which have been allocated Federal New Markets Tax Credits serving Ohio. The Ohio New Markets Tax Credits are provided to investors who invest in the funds established by a CDE for projects in Ohio.

The tax credits are structured to be used for investments over the course of seven years. The total tax credit value will be 39 percent with the yearly percentage of tax credits being: 0% for each of the first two years, 7% for the third year and 8% for the next four years.

The amount of tax credit claimed shall not exceed the amount of the taxpayer’s state tax liability for the tax year for which the tax credit is claimed. The maximum state tax credit impact in any fiscal year shall not exceed $10 million. The maximum amount of state tax credits for one project shall not exceed $1 million.