Tax Structure and Incentives
Ohio’s competitive and profitable business environment makes it easier for companies to expand and land here with solid financial footing. Our strategic location and continuously improving business climate brings together a full range of benefits from low-cost access to customers and a comprehensive supply chain, to streamlined regulatory processes and funding programs that align with a growing company’s financial needs.
In addition, the Cleveland Plus region’s state and local tax incentives, grants and low-interest financing help businesses to reduce risk and operate profitably.
Cost-effective, Stable Business Climate
Ohio is among the top three states for favorable business tax rates on new investments.* State tax reforms have lowered business tax burdens by more than half, eliminating taxes on:
- Corporate income
- Investments in equipment
Maximize Profits with a Competitive-Cost of Doing Business
- No tax on corporate profits
- No tax on machinery, equipment, and R&D investments
- No tax on products sold to customers outside of Ohio
- No tax on tangible personal property
Ohio’s Commercial Activity Tax is a low 0.26 percent on gross receipts exceeding $1 million – and is not applied to gross receipts outside of Ohio.
Learn more about Ohio’s business friendly tax environment at jobs-ohio.com/why-ohio/incentives.
- JobsOhio Growth Fund Loan – The JobsOhio Growth Fund provides capital for expansion projects to companies that have limited access to capital and funding from conventional, private sources of financing. JobsOhio will consider loans to companies that are in the growth, established or expansion stage, and that have generated revenues through a proven business plan. The JobsOhio Growth Fund’s loan decisions are based on a number of project factors, including but not limited to job creation, additional payroll, fixed-asset investment commitment, project return on investment, and project location.
- JobsOhio Workforce Grant – The JobsOhio Workforce Grant was created to promote economic development, business expansion, and job creation by providing funding for the improvement of worker skills and abilities in the State of Ohio. Grant decisions are based on a number of project factors, including but not limited to job creation, additional payroll, fixed-asset investment commitment, project return on investment, and project location.
- JobsOhio Economic Development Grant – The JobsOhio Economic Development Grant was created to promote economic development, business expansion, and job creation by providing funding for eligible projects in the State of Ohio. Grant decisions are based on a number of project factors, including but not limited to job creation, additional payroll, fixed-asset investment commitment, project return on investment, and project location.
- JobsOhio Revitalization Program – The JobsOhio Revitalization Program is focused on helping revitalize sites in preparation for end-users that support future job creation opportunities for Ohioans. The program, comprised of both loans and grants, is available to public and private entities seeking to cleanup and redevelop sites across Ohio.
State of Ohio Incentives
- Job Creation Tax Credit – A refundable tax credit to companies generally creating at least 10 new jobs (within three years) with a minimum annual payroll of $660,000. The tax credit is applied to the company’s commercial activity tax liability.
- Ohio Enterprise Bond Fund – Provides revenue bond financing through an S&P rated fund. Proceeds from the sale of bonds are loaned to companies for fixed-rate, long-term capital asset financing. Up to $10 million in financing is available through the program.
- 166 Direct Loan – Provides loans for land and building acquisition, construction, expansion, or renovation and equipment purchases for eligible businesses. The program provides low-interest loans up to $1.5 million.
- Innovation Ohio Loan Fund – Provides loans for acquisition, construction, and related capital costs of technology, facilities, and equipment purchases. The fund was created to assist existing Ohio companies in developing next-generation products and services within the state’s targeted industry sectors. The loan may finance up to 75% of allowable project costs with loans ranging in size from $500,000 to $1,500,000.
- Research and Development Investment Loan Fund – Provides loan financing between $500,000 and $5 million for projects primarily engaging in research and development activity. Rates are fixed (at or below market rates) with other loan terms similar to those of commercial bank financing.
- Roadwork Development (629) – Funds are available for public roadway improvements, including engineering and design costs. Funds are available for projects primarily involving manufacturing, research and development, high technology, corporate headquarters and distribution activity. Projects must typically create or retain jobs.
- Ohio Third Frontier – The single largest source of tech and new business start up funding in Ohio. It’s a 10-year, $2.1 billion source of money for innovation and regional support. Learn more at thirdfrontier.com.
- Data Center Tax Exemption – The state provides a partial or complete sales and use tax exemption for purchases of computer data center equipment and on the installation, delivery, and repair of such equipment for qualified businesses. Eligible projects will have $100 Million in capital investment and $1.5 Million in payroll.
Learn more about Ohio’s impressive variety of incentive programs at jobs-ohio.com/why-ohio/incentives.
Local Incentives & Funding
For information on local incentives, please contact one of Northeast Ohio’s local economic development organizations.
Cleveland Plus businesses often turn to our port authorities for financing alternatives, including fixed-rate financing programs, off-balance-sheet financing and leasing programs and infrastructure financing programs.
*Sources: Ernst & Young LLP and the Council on State Taxation, Competitiveness of State and Local Business Taxes on New Investments, 2011; http://jobs-ohio.com/funding/