Financing and Incentives
Incentives
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 activity tax 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.
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 exceed 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.
Local communities in Ohio are authorized to collect 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 abatement 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 100 percent for 15 years. Note that tangible personal property taxes in Ohio are being phased out through 2009.
Lima City is designated a Community Reinvestment Area and can offer a reduced abatement up to 100% on real property taxes.
Financing
Allen County Revolving Loan Fund:
The Allen County Revolving Loan Fund (RLF) is a flexible source of financing for businesses expanding or locating to Allen County. Loan amounts are subject to the availability of funds.
D'Arcy Loan Fund:
The D'Arcy Loan Fund is a local funding source for businesses expanding or locating to Allen County. The fund provides low interest loans to assist with Allen County economic development projects. Loan amounts are subject to the availability of funds.
Proceeds from a 504 loan can be used for major fixed-asset projects such as the purchase of land, buildings or equipment. Funds can also be put toward construction, remodeling and infrastructure improvements.
SBA 7(a) loan proceeds may be used to establish a new business or to assist in the operation, acquisition, or expansion of an existing business. These may include (non-exclusive):
- To purchase land or buildings, to cover new construction, as well as expansion or conversion of existing facilities;
- To acquire equipment, machinery, furniture, fixtures, supplies, or materials;
- For long-term working capital, including the payment of accounts payable and/or for the purchase of inventory;
- To refinance existing business indebtedness, which is not already structured with reasonable terms and conditions;
- For short-term working capital needs, including: seasonal financing, contract performance, construction financing, export production, and for financing against existing inventory and receivables under special conditions; or
- To purchase an existing business.
Manufacturers may use funds from a Regional 166 to finance land and building acquisition, new construction, renovation projects, or new or used equipment purchases.
Provides loans for land and building acquisition, expansion or renovation, and equipment purchase.
Provides loans for land and building acquisition, construction, expansion or renovation and equipment purchases for eligible businesses.
Provides allocations to eligible issuers the ability to issue tax exempt Private Activity Bonds up to a state limit known as "Volume Cap" that is determined annually on a per capita basis for projects consisting of multi-family housing, single-family housing, exempt facilities, manufacturing and student loan bonds.
A private, nonprofit corporation designed to lead Ohio's job-creation efforts by focusing on attracting and retaining jobs.