The Ohio New Markets Tax Credit program provides an incentive for investors to fund businesses in low-income communities. These "new markets" are traditionally underserved by private sector capital. This lack of capital stifles entrepreneurs and impedes growth, despite promising opportunities for investment and business expansion.
The Program awards tax credit allocation authority to Community Development Entities (CDE) serving Ohio that serve as an intermediary between investors and projects. The investor provides cash to a CDE in exchange for the tax credit (39 percent of their investment claimed over seven years). The CDE uses the cash for projects in low-income communities.
$10 million in tax credit allocation authority is available to CDEs each year.
Tax credit allocation authority is awarded to Community Development Entities, who sell the credit to investors and use that money for high-impact projects. The tax credit can be applied to applicable financial institutions, and foreign and domestic insurance premiums.
- Businesses in the low-income community receive below-market, non-traditional or flexible loans or equity for their project.
- The low-income community where the business is located receives increased investment in the area, new job opportunities and potentially services or products that are made available through the new business.
- Community Development Entities use the tax credit as a means to achieve their mission of investing in and serving low-income communities.
- Investors reduce their tax liability and receive a positive return on their investment.
How to Apply
Applications are received annually for the Ohio New Markets Tax Credit. Qualified CDEs with available (or anticipated) federal NMTC allocation can file a competitive application with the Ohio Department of Development. ONMTC awards are announced after the annual federal NMTC award announcements to coincide the allocations.