Urban Development | Ohio New Markets Tax Credits

Five Entities Awarded Ohio New Markets Tax Credits in Round 2

The Ohio Department of Development awarded a total of $10 million to five Ohio entities to spur economic investments in low-income communities, leveraging at least $25.6 million across Ohio. Congratulations to the following entities:

-Cincinnati New Markets Fund, LLC (serving Over-the-Rhine)
-Cleveland New Markets Investment Fund II, LLC (serving Cuyahoga County)
- Dayton Region New Market Fund, LLC (serving Montgomery, Preble, Darke, Miami, Champaign, Clark, Greene, Warren, and Clinton Counties)
- Ohio Community Development Finance Fund (serving Ohio)
- Northeast Ohio Development Fund, LLC (serving Cuyahoga County)

See the press release for more information on the awardees.

Program Goals


The goals of the Ohio New Markets Tax Credit Program are to:

  • attract additional federal tax credits;
  • encourage private investment funding to Ohio businesses; and
  • spark revitalization in Ohio’s communities.

The Program is designed to 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.

 

 

Program Summary

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. While Ohio has already attracted more than $1.1 billion dollars in Federal New Markets Tax Credits, this Program will give Ohio a significant competitive advantage nationally because very few states have a companion program to leverage and attract Federal New Markets investments.

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

Eligible Areas

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.

Eligible Applicants

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.

Tax Credit Awards

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
  • 8% for the next four years

Funding Limits

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.

Contact Us

For questions or comments regarding the Ohio New Markets Tax Credit program, please contact the Urban Development Division at (614) 995-2292 or by clicking e-mail us.