Dayton Area Chamber of Commerce
8 N. Main Street | Suite 100 | Dayton, Ohio 45402-1904 | (937) 226-1444
Job Creation Tax Credit (JCTC): The Job Creation Tax Credit is a refundable tax credit 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 refundable 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 activities tax (CAT) liability. Should the amount of the credit exceed the company’s CAT liability for any given year, the difference is refunded. Approved projects generally range between a 25 and 55 percent credit for a period of 5 to 7 years. The business must apply for the credit before committing to the project.
Job Retention Tax Credit (JRTC): The Job Retention Tax Credit is a non-refundable tax credit 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 the 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 for the credit before committing to the project.
Research and Development Investment Tax Credit: The R&D Investment Tax Credit is a non-refundable Ohio corporate franchise (income) tax credit for all investment 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 county. The credit can be carried forward for up to seven years.
Local Property Tax Exemptions: Local communities in Ohio are authorized to collect local property taxes on real property (land and buildings) and tangible personal property (machinery and equipment, furniture and fixtures, and inventory). Through the Ohio Enterprise Zone and Community Reinvestment Area programs, local communities can elect to abate a portion of property taxes owed by a company. Typical abatements under the Ohio Enterprise Zone are 50 to 75 percent of taxes exempted for 10 to 15 years, on real or tangible personal property. Under the Community Reinvestment Area program, real property taxes can be abated up to 100 percent for 15 years.
Sales and Inventory Tax Exemptions: 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 exempt from local tangible personal property tax.
The Work Opportunity Tax Credit Programs (WOTC): The Work Opportunity Tax Credit Program is a federal tax credit which provides Ohio employers with a tax credit against their federal tax liability for hiring individuals from nine target groups of disadvantaged job seekers. Tax credits range from $1,200 to $2,400 for all WOTC target groups. Employers may receive a maximum credit of up to $9,000 per eligible employee for the Long Term IV-A target group. The WOTC Tax Credits are administered by the Ohio Department of Job & Family Services.
Empowerment Zone (EZ) and Enterprise Community (EC) Tax Credit Programs: The Empowerment Zone Tax Credit gives employers an incentive to retain or hire individuals who both live and work in an EZ. Businesses can claim credit, even retroactively, for as much as $3000 per qualified EZ employee each year. This tax credit is attractive to businesses that are looking to reduce tax liability or that are considering expanding or relocating to an EZ.
The Enterprise Community Credit is available to qualified companies that locate within regions that have been previously designated for renewal. The program includes a state income tax credit for each net new job created based on average wage, training credits, and the refund of sales and used taxes on the purchase of materials used in the construction of new facility or expansion of existing facilities. The result of this type of program is the increased investment by the business community to make both capital investments in the EZ and to provide jobs for the local residents.
New Market Tax Credit: Using the popular and effective Federal New Markets Tax Credit as a model, the budget creates an Ohio New Markets Tax Credit. The credit will encourage investments in securities issued by community development entities that, in turn, will make investments in qualified low-income community businesses. This new initiative will help spark revitalization efforts in our urban areas. Named as one of the Top 50 in the “Innovations in American Government Awards” in March 2009, new markets tax credits have successfully incentivized significant additional private sector investment into distressed areas throughout the country. Ohio will join a handful of states in complementing and supporting the credit with its own state version, which will give Ohio a significant competitive advantage in attracting these investments nationally.
The Ohio New Markets Tax Credit provides a nonrefundable tax credit with a four-year carry-forward against the insurance premium and financial institution franchise tax and the foreign insurance company tax, for insurance companies and financial institutions that purchase and hold securities issued by low-income community organizations to finance investments in qualified active low-income community businesses in Ohio. Up to $1 million in credits will be available per business, with a total of $10 million in credits available per year.
Site Selection Assistance: Using JobsOhio.com and a network of local economic development organizations, assistance is available to help identify industrial site and building opportunities for new business investment projects. Information on available properties is maintained by a partnership between state and local economic developers, and is available 24/7 online at jobs-ohio.com/site-selection.
Expedited Permitting Assistance: Collaborative efforts led by the Ohio Department of Development and involving the Ohio Environmental Protection Agency, Ohio Department of Commerce, Ohio Department of Transportation, and Public Utilities Commission of Ohio, will assure that all necessary industrial, building, environmental, and related permits are processed in a timely, business-friendly manner. Where possible, ombudsman services can be offered to further streamline any multi-agency permitting processes.
Brownfield Revolving Loan Fund: The Brownfield Revolving Loan Fund (RLF), capitalized by a grant from the United States Environmental Protection Agency (USEPA), offers below-market rate loans to assist with the remediation of a Brownfield property to return it to a productive economic use in the community. Municipalities, non-profit and private entities can apply for program funding to conduct remediation activities at eligible sites.
Clean Ohio Fund – Brownfield Revitalization: The Clean Ohio Revitalization and Clean Ohio Assistance Funds are key financial components to helping communities build economic capacity by providing the funds needed for brownfield redevelopment. Such redevelopment allows communities to reclaim and improve underused properties, making them viable for new economic activity. Local forms of government are eligible for Clean Ohio funding to conduct cleanup, demolition and environmental assessment activities. The Ohio Department of Development, through its Urban Development Division, administers both programs in consultation with the Ohio Environmental Protection Agence (EPA).
Ohio Historic Preservation Tax Credit Program: The Ohio Historic Preservation Tax Credit program provides a tax credit for the rehabilitation expenses to owners of historically significant buildings. The tax credit subsidizes 25% of qualified rehabilitation expenditures (QRE) for historic rehabilitation projects up to a $5 million cap. The Urban Development Division is responsible for administering the program in partnership with the Ohio Department of Taxation and Ohio Historical Society.
Roadwork Development (629) Account: These 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.
Ohio Rail Development Commission: Loan and grant funds are available for public or private rail improvements, including engineering and design work. The amount and type of funding available for a project will depend on job creation and rail traffic volume generated by the project.
Ohio Water Development Authority – Local Economic Development Fund: Low-interest financing is available to communities for public water and sanitary sewer improvements. Loans are made directly to local communities on favorable interest rates and terms.
Community Development Block Grant: Federal grant funds are available through the state to assist with public road, water, and sanitary sewer improvements specifically benefiting economic development projects. Job creation must be involved, and companies must commit to hiring at least 51 percent of employees from low- to moderate-income populations in the county where the project is located.
Industrial Site Improvement Fund: Assists geographical and/or economically disadvantaged countries around Ohio in the expansion and modernization of buildings, remediation of environmentally contaminated property, and completion of other infrastructure improvements at sites used primarily for commercial or industrial activities.
The Third Frontier Project was initiated in February 2002. This project is the state’s largest-ever commitment to expanding Ohio’s high-tech research capabilities and promoting innovation and company formation that will create high-paying jobs for generations to come. The 10-year, $1.6 billion initiative is designed to:
Through the Third Frontier Project and related initiatives, the state of Ohio offers a comprehensive set of programs that support world-class research, commercialization, training, and information technology infrastructure designed to accelerate company growth and job creation throughout Ohio.
The Ohio Third Frontier Program supports a comprehensive portfolio of program activities that include:
Wright Centers of Innovation: The goal of the Wright Centers of Innovation (WCI) Program is to support large-scale world-class research and technology development platforms designed to accelerate the pace of Ohio commercialization. Wright Centers are to be collaborations among Ohio higher education institutions, non-profit research organizations, and Ohio companies. The specific technology/research focus areas of WCIs represent areas of competitive differentiation that are unique and sustainable thus making them difficult to imitate and overcome by others. The WCI Program supports the acquisition of major capital assets to establish the center and initial operating funds for projects and services offered by the center.
Research and Commercialization Program: The goal of the Research Commercialization Program (RCP) is to support the development and commercialization of innovative technologies and new products that will have beneficial long-term economic impacts for Ohio. RCP projects are of a substantial scale and consistent high quality that will move Ohio toward a position of national leadership in selected areas of technological focus. The RCP provides support to any Ohio based organization to conduct applied research and development related to themes that have the potential for creating new products, and to build sustainable partnerships between organizations that can develop and commercialize new products.
Wright Projects: The goal of Wright Projects is to support near term commercialization projects requiring major capital acquisitions and improvements at Ohio higher education institutions and nonprofit research organizations with a secondary benefit to support technical workforce training.
Ohio Research Scholars: The goal of the Ohio Research Scholars Program (ORSP) is to strengthen and increase the number of clusters of research excellence led by Ohio’s academic institutions that support regional economic priorities. The ORSP achieves this through 1) aggressive investment in the attraction of senior research talent and related facilities and equipment, and 2) promotion of unique collaborations with non-profit and for-profit research and commercialization partners needed to build and sustain scientifically and commercially promising lines of research. A research cluster is defined by a critical mass of distinguished and highly productive faculty and researchers, quality graduate students, infrastructure, and robust academic, business and government collaborations that have led to the attainment of international prominence in research and commercialization. The resources of a cluster must be aligned to pursue a specific technology/research focus area representing areas of competitive differentiation that are unique and sustainable thus making them difficult to imitate and overcome by others. The ORSP supports the creation of endowed positions for senior faculty and the acquisition of facilities and equipment that generally support the growth of defined research clusters.
Pre-Seed Funds: Increases the availability of professionally managed capital and associated services to accelerate the growth of early-stage Ohio technology companies.
Entrepreneurial Signature Program: Provides grants which significantly increase technology-based entrepreneurial commercialization outcomes in six defined geographic regions and to focus on technology based sectors offering important economic development prospects for that region.
Fuel Cell and Advanced Energy Programs: Supports R&D that addresses the technical and cost barriers to commercialization in Ohio of fuel cell and other advanced energy components and systems.
Ohio Research Commercialization Grant Program: Supports accelerated Ohio commercialization by small companies awarded selected federal R&D funding.
Internship Program: The goal of the Ohio Third Frontier Internship Program is to develop a pool of talented workers for Ohio’s businesses, create enriching student work experiences and assist students in obtaining permanent full-time employment in Ohio after graduation. This dynamic, focused program positions Ohio to develop and retain technologies in the state that require educated and skilled workers.
Targeted Industry Attraction Program: Focuses resources and incentives on the attraction of companies that can help build critical mass in selected growth industries in Ohio.
Innovation Ohio Loan Fund: Assists Ohio companies in developing next generation products and services in targeted industry sectors by financing the acquisition, construction and related costs of technology, facilities and equipment.
SBA Express Loan: This is a 50% loan guarantee, which means the SBA does not give you the loan, you must go through your approved lender. The SBA promises (guarantees) the lender that a portion of the loan will be paid back if the borrower defaults. The loan can be used for working capital, business real estate, inventory, equipment, furniture and fixtures an revolving lines of credit. Contact – www.sba.gov
SBA Community Express Loan: The program is an 85% guaranty for amounts of $150,000 to $250,000, which means the SBA does not give the loan directly. You must go through an approved lender. The SBA promises (guarantees) the lender that a portion of the loan will be paid back if the borrower defaults. This program is only available to women, minorities, veterans and businesses located in economically distressed areas. This loan program also requires the utilization of an approved technical assistance provider. Contact – www.sba.gov
Certified Development Company 504 Loan: This loan can be used for purchasing land or real estate, constructing or renovating facilities or buying machinery or equipment. CDC’s (certified development corporations) are non-profit corporations that administer this program for the SBA. A typical borrower for this loan has contributed at least 10% of all project coasts and has secured from a private sector lender. Forty percent of the project cost is then secured from a CDC. All CDC’s can process loan transactions in any county within Ohio. The third party lender typically funds 90% of the project costs until a bond is sold to pay down the third party lender to 50%. Contact – www.sba.gov
SBA 7(a) Loan: This SBA program designed to assist growing small for-profit businesses that can’t get financing at reasonable terms through normal lending channels such as banks. These loans are for use with working capital; buying land and real estate; construction, renovation, improvements; buying furniture, machinery and equipment; or buying inventory. This is a loan guaranty loan meaning the SBA promises the lender will be paid back should the borrower default. Contact – www.sba.gov
SBA 504 Loan: This loan is designed for use as a fixed asset loan for small businesses expansion needs that are well suited for construction and renovation projects and/or equipment purchases that will create or retain jobs. The typically structure of the loan is 10% equity from the borrower, 50 from the primary financial institution and 40% from the gap financing lender. This loan typically has long-term financing, low down payments and fixed, below market interest rates, an SBA 504 loan can range from $50,000 to $4,000,000. Contact – www.sba.gov
ARC Loan: The America’s Recovery Capital (ARC) loan program is designed to give a viable small business suffering from immediate financial hardship some temporary financial relief so they can keep their doors open and get their cash flow back on track. This is a deferred payment loan up to $35,000, to be used for principle and interest payments on existing, qualifying debt/loans. ARC loans are 100% guaranteed by the SBA and have no SBA or lender fees and there are no interest charges to the borrower. Contact – www.sba.gov
CDBG Loan: The CDBG is financing for small and medium sized for-profit businesses for the purchase of real estate, equipment, or construction projects that will create or retain jobs. Preferential exception will be given to minority or female owned businesses. The typical loan structure is 50% for private lender, 10% from the borrower and 40% gap financing. Contact – www.sba.gov
Neighborhood Business Assistance Loans: Provides financial assistance to existing and /or expanding neighborhood small business in the city of Dayton.
Enterprise Ohio Investment Company (EOIC): Provides capital for promising Ohio based businesses. Leveraging private funding, EOIC invests in both established and start-up companies. Contact – www.sba.gov
SBA Patriot Loan Express Loan: This loan is offered by the SBA’s network of participating lenders nationwide and features the fastest turnaround time for loan approvals. This program is specifically designed to support veterans; Active duty members are eligible for the Military Transition Assistance Program; Reservists and National Guard members; Current spouses of any of the previously mentioned groups; Widowed spouses of a veteran or service members. The typical borrower is a start up or growing small for-profit business. Loans are available up to $500,000 and qualify for the SBA’s guaranty of up to 85% of loans up to $150,000 or less and 75% for loans over $150,000 up to $500,000. Loans rates are typically 2.25% to 4.75% over prime. Contact – www.sba.gov
Ohio Linked Deposit Program: The Ohio Linked Deposit Program helps Ohio small businesses fund the creation of new employment opportunities by lowering the interest rate on bank loans for small businesses. Cheaper borrowing allows businesses more time to become financially stable after completing an expansion or recovering from a crisis. Contact – Ohio Department of Development
GrowNow Financing: GrowNow is aimed at creating and saving jobs as well as helping small businesses adapt to changing circumstances as they grow. GrowNow provides an interest-rate reduction on loans to Ohio’s small businesses and, as long as it’s creating or protecting jobs, the loan can be used for any purpose. Altogether, a business could save up to $24,000 over two years, money that effectively stretches the value of the loan, and can help a business to expand, move, or adapt to the changing marketplace.
Ag-Link Program: The Ohio Treasurer of State was once again committed to providing Ohio farmers with reduced rate financing to help offset the high cost of annual operating funds in this difficult economic climate. The Treasury has leveraged the $125MM allocated to the Agricultural Linked Deposit (Ag-Link) program to secure certificates of deposit with local banks and the Farm Credit system to provide interest rate reductions to Ohio farmers. Ag-Link’s structure is similar to GrowNow, using state funds to leverage lower interests for loans ranging up to $100,000 for Ohio farmers.
BidOhio: BidOhio benefits Ohio taxpayers and banks by providing an easy and equitable bidding award process. The Treasury conducts auctions online at www.bidohio.com on the first and third Tuesday of every month, awarding up to $50 million in certificates of deposit during each auction.
SaveNOW Program (Pilot Program): The Ohio Treasury and partnering banks are offering the new SaveNOW program, a savings account with 3.25%+ bonus interest to improve the financial health of Ohioans and their families. The SaveNOW program has two components: High Interest Savings Accounts and Financial Education.
The bank partners for SaveNOW are: National City Bank, PNC Bank, Wayne Savings Bank (based in Wooster), Main Source Bank (based in Troy), Liberty Savings Bank (based in Wilmington) and First National Bank (based in Upper Sandusky).
Rapid Outreach Account: 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 the availability of Rapid Outreach funding is determined. Contact – Ohio Department of Development
Pioneer Rural Loan: Purpose is for small for-profit start-up and existing businesses in Ohio’s rural areas that will create and retain jobs. The program is available to businesses that can document job creation in Ohio’s rural areas. Borrowers must create/retain at least one job for every $35,000 received during the first 3 years of the project. The loan can be used for buying, expanding, or renovating land facilities as well as purchasing equipment and has a maximum loan amount of $750,000. Contact – Ohio Department of Development
Regional 166 Direct Loan: Direct loan financing provides funds for land and building construction, building acquisition, expansion and renovation, and purchase of machinery and equipment. Amounts of financing are usually set at 30 percent of the project cost to a maximum of $1 million, subject to an increase by the Director of Development, with a minimum loan amount of $350,000. The rate is fixed (currently at 3 percent), with terms similar to those of commercial bank financing. Eligible projects must involve significant job creation or retention. Contact – Ohio Department of Development
Ohio Enterprise Bond Fund: Revenue bond financing is available through this S&P AA- (double A-minus) rated fund, whereby proceeds from the sale of bonds is loaned to companies for fixed rate, long-term capital asset financing. Rates are fixed depend on the type of bond issued, while terms are between 7 to 10 years for equipment and 15 to 20 years for real estate. Up to $10 million in financing is available through this program. Contact – Ohio Department of Development
Research & Development Investment Loan Fund: Direct loan financing of 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, non-refundable Ohio corporate franchise (income) tax credit for all principal and interest payments during the year. Contact – Ohio Department of Development
Rural Industrial Park Loan: Provides direct loans to rural, distressed local communities and applicants committed to creating well-planned industrial parks. The Rural Industrial Park Loan program was created to provide direct loans to local communities and applicants committed to creating well planned industrial parks. Contact – Ohio Department of Development
Ohio Minority Direct Loan Program: The Ohio Minority Direct Loan Program provides direct loans for businesses locating or expanding in Ohio that demonstrate they will create new jobs for Ohio citizens. The program, authorized under Chapter 122 of the Ohio Revised Code, is administered by the Ohio Department of Development’s (ODOD), Office of Minority Financial Incentives. The Minority Direct Loan Program focuses on several factors to determine the eligibility of a business for the State’s incentive financing. Chief among those determinations are the number of jobs created and/or retained as a result of the State’s investment, the extent of participation by the business and a conventional lender in the project; and the demonstration by the business that the State’s assistance is necessary in order for the project to go forward.
In its review of loan applications, the office also evaluates the management capacity of the company, the availability of working capital, and the overall ability of the company to repay its debt. These criteria are designed to provide a more definite review of the applicant’s need and capabilities. The State’s financing is take-out financing. In other words, the business will need to complete its project utilizing interim financing from a conventional lender, and its equity. When the project is completed, the State’s funds will be released.
Funds received under the Minority Direct Loan Program may be used for part of the costs of acquisition, renovation or construction of depreciable fixed assets. In addition, limited soft costs related directly to the fixed asset expenditure may be included. Examples of eligible soft costs include: architectural/engineering costs; installation costs for machinery, and financing costs for bank loans. Contact – Ohio Department of Development
Minority Business Bonding Program: The Minority Business Bonding Program is designed to provide bonding assistance to minority businesses who otherwise cannot obtain bonding. The goals of the program are: to produce long term positive results by assisting minority businesses in eventually obtaining bonding from the private sector; and to provide minority businesses with the best opportunity for long-term success and stability, while concurrently reducing the State of Ohio’s exposure to losses. The maximum bond amount is one million dollars per company. A premium for each bond issued (not to exceed two percent of the penal sum of the bond) is charged, however there is no charge for bid bonds if the bid is unsuccessful. The actual premium rates charged will be determined by the Ohio Department of Development’s Office of Minority Financial Incentives on a case-by-case basis. Contact – Ohio Department of Development
Urban Redevelopment Loan: Provides low interest loans to municipalities or designated nonprofit economic development organizations to acquire real estate for assembly into developable parcels and remediate any Brownfield contamination site to entice private business investment in distressed urban locations. This loan was created to remove the barriers to urban core redevelopment thereby promoting economic development and business expansion through financial assistance for eligible projects in Ohio. Contact – Ohio Department of Development
Innovation Ohio Loan Fund: The Innovation Ohio Loan Fund was created to assist existing Ohio companies develop next generation products and services within certain Targeted Industry Sectors by financing the acquisition, construction and related costs of technology, facilities and equipment. Ohio’s manufacturing sector will be a key target of this program. The Innovation Ohio Loan Fund provides competitive financing terms on loans to finance projects that will positively impact Ohio by creating high-value jobs, increased tax revenues, and improve the economic welfare of the State of Ohio.
The Innovation Ohio Loan Fund addresses an identified need in the capital-funding continuum. The Innovation Ohio Loan Fund is intended to supply capital to Ohio companies having difficulty securing funds from conventional sources due to technical and commercial risk factors associated with the development of a new product or service.
Ohio Linked Deposit Program: The Ohio Linked Deposit Program helps Ohio small businesses fund the creation of new employment opportunities by lowering the interest rate on bank loans for small businesses. Cheaper borrowing allows businesses more time to become financially stable after completing an expansion or recovering from a crisis. Contact – Ohio Department of Development
8 N. Main Street | Suite 100 | Dayton, Ohio 45402-1904 | (937) 226-1444
