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The Ohio New Markets Tax Credit Program

Contact Information

John Werkman
Tax Incentives Manager
Office of Strategic Business Investments
(614) 466-6791
John.Werkman@development.ohio.gov

 

Overview

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.

For Whom

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.

Benefits

  • 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 in the spring for the Ohio New Markets Tax Credit. Qualified CDEs with available federal allocation file a competitive application with the Ohio Development Services Agency. Awards are typically made in the summer. The application will be available on the left under ‘Application Information’.

Program Updates

Round 6 Awards Announced

Congratulations to the Community Development Entities that received awards for Round 6 of the Ohio New Markets Tax Credit Program.

Finance Fund (Statewide) will receive $4 million in tax credits for a minimum of $10.2 million in investments. They have received nine allocations from the Federal New Markets Tax Credit program, totaling $295 million. Their service area includes the entire State of Ohio.

Cincinnati Development Fund (Hamilton County) will receive $2 million in tax credits for a minimum of $5.1 million in investments. They have received five allocations from the Federal New Markets Tax Credit program totaling $187 million. Their service area is Hamilton County.

Cleveland New Markets Investment Fund II, LLC (Cuyahoga County) will receive $2 million in tax credits for a minimum of $5.1 million in investments. The Cleveland New Markets Investment Fund II is controlled by the Cleveland Development Advisors, Inc. They have received five allocations from the Federal New Markets Tax Credit program totaling $155 million. Their service area is Cuyahoga County.

Chase New Markets Fund (National) will receive $1 million in tax credits for a minimum of $2.56 million in investments. They have received eight allocations from the Federal New Markets Tax Credit program, totaling $525 million. Their service area includes the entire State of Ohio.

Development Fund of the Western Reserve (Northeast Ohio) will receive $1 million in tax credits for a minimum of $2.56 million in investments. The Development Fund of the Western Reserve (DFWR) has received two allocations from the Federal New Markets Tax Credit program, totaling $65 million. Their service area covers 18 counties in Northeast Ohio.