Technology Project Incentive Overview
Lucrative project incentives area available to qualifying firms that are expanding or locating in metropolitan Youngstown-Warren, Ohio. The Regional Chamber will work with you to determine eligibility for, explain and help secure the applicable incentive programs highlighted below:
Specific Project Incentive Programs
Advanced Energy Program to support R&D that addresses the technical and cost barriers to commercialization in Ohio of advanced energy components and systems, with preference to wind, biomass, and energy storage.
Advanced Materials Program to support R&D that addresses the technical and cost barriers to commercialization in Ohio of advanced materials products with preference to polymer and carbon nano-materials, liquid crystals, and bio-based materials.
Biomedical Program to support R&D that addresses the technical and cost barriers to commercialization in Ohio of biomedical products, with preference to cardiovascular, regenerative medicine, and orthopedics.
Fuel Cell Program to support R&D that addresses the technical and cost barriers to commercialization in Ohio of fuel cell and other advanced energy components and systems. Innovation Ohio Loan Fund to assist Ohio companies in developing next generation products and services in targeted industry sectors by financing the acquisition, construction, and related costs of technology, facilities, and equipment.
Medical Imaging Program to support research and development that addresses the technical and cost barriers to commercializa¬tion in Ohio of medical imaging components and systems.
Ohio Research Commercialization Grant Program to support accelerated Ohio commercialization by small companies awarded selected federal R&D funding.
Photovoltaic Program to support R&D that addresses the technical and cost barriers to commercialization in Ohio of photovoltaics components and systems.
Sensors Program to support research and development that addresses the technical and cost barriers to commercialization in Ohio of sensors components and systems supporting key Ohio industries.
Targeted Industry Attraction Grants to focus resources and incentives on the attraction of companies that can help build critical mass in selected growth industries in Ohio.
General Project Incentive Programs
Enterprise Zones (EZ): Enterprise Zones have been established in metropolitan Youngstown-Warren, Ohio. Companies that locate in an EZ could be eligible for tax abatements on investments in real property (i.e. building, construction, expansion, renovation).
Community Reinvestment Area (CRA): Community Re-investment Areas are located in designated parts of metropolitan Youngstown-Warren, Ohio. CRAs provide real-property tax exemptions for companies constructing or renovating a facility.
Ohio Job Creation Tax Credit (JCTC): A refundable Commercial Activity Tax credit based the percentage of state income tax paid by new employees is available for businesses that expand or locate in Ohio. The maximum rate and term of the credit is 75% for 10 years. Approved projects generally range from 30-50% for three to six years.
Research and Development Investment Tax Credit: Provides a nonrefundable tax credit against the commercial activity tax and is designed to encourage Ohio’s corporations to invest in increased research and development activities. The credit equals 7% of the excess amount of Qualified Research Expenses.
Technology Investment Tax Credit: Provides a tax credit for taxpayers that invest in small, Ohio-based technology companies. The amount of the tax credit is 25% (or 30% in some limited cases) of the amount invested by the taxpayer. The maximum investment to which this credit may be applied is $250,000 (or $300,000). The credit may be claimed against personal income tax, CAT, public utility excise tax or the dealers in intangibles tax. To be eligible, the company must have its principal place of business located in Ohio and must also have less than $2.5 million in revenue or less than $2.5 million in net assets for the most recently completed fiscal year. Finally, the entity must be engaged in a business that primarily involves R&D and/or technology transfer.
Research and Development Sales Tax Exemption: Provides an exemption from state and county sales tax for companies that purchase equipment for research and development activities.
Project Loans / Financing:
State and federal programs provide loans for the acquisition of land, structures, new construction, facility renovation/expansion and the purchase of machinery and equipment. Interest rates are typically below bank levels and the programs allow greater debt leverage / less cash equity. Most programs require bank and owner equity participation and specify minimum public funds/jobs ratios. Other requirements may include payment of Prevailing Wage Rates for construction and/or equipment installation. Select program examples include:
GrowNOW Small Business Linked Deposit Program:
This interest rate reduction program is designed to help small businesses grown by providing them with critical cash flow. When a business is approved for a loan from an eligible bank, GrowNOW provides an additional 3% discount on the loan’s already-negotiated interest rate, when the loan is linked to creating or saving jobs in Ohio.
Research & Development Investment Loan Program: The R&D Investment Loan Fund provides assistance in the form of a low-interest loan, partnered with a tax credit. Businesses that meet the program requirements will be eligible for a dollar-for-dollar credit against their Ohio tax liability, equal to the amount of principal and interest repaid on the loan. The maximum annual credit is $150,000. Eligible projects are defined as those in which research is undertaken for the purpose of discovering and developing new or improved products, processes, techniques, formulas or inventions.
Innovation Ohio Loan Fund Program: Provides financial resources for product commercialization for leading technology companies. The IOF can finance up to 75 percent of a project’s qualifying costs through loans in the range of $500,000 to $1.5 million. Allowable costs include the acquisition, construction, renovation or improvement of facilities, and the acquisition and installation of equipment for innovative projects that create new products and services.
Direct (166) Loan Program: This state sponsored program provides loans for land and building acquisition, expansion and renovation and the purchase of machinery and equipment. The borrower must create one job for every $50,000 received The loan may range from $500,000 to $1,500,000.
166 Regional Loan Program: This program provides loans for land and building acquisition, expansion and renovation and the purchase of machinery and equipment. The borrower must create one job for every $50,000 received. The maximum loan amount is $500,000.
Tax-Exempt Industrial Revenue Bonds (IRB): Small issue industrial revenue bonds can be used for manufacturing purposes. Funding is available for land and building acquisition, construction, expansion or renovation, and equipment purchase. The bonds are issued by public entities on behalf of private, for-profit companies. Interest earned by the bond buyers is exempt from federal (and some state) income tax.
SBA 504 Direct Loan Program: This federal program provides fixed rate, second mortgage financing for real estate (land, building, construction/renovation) and machinery and equipment. The borrower must create one new job within 3-years for every $65,000 received. The maximum loan is typically $5 million for public policy goals. Real estate loans are 20-year and machinery/equipment loans are 10-year. Bank participation and cash equity from the owner are required
Revolving Loan Funds (RLF):
Counties, cities and some villages and townships have local revolving loan funds. While rates and terms vary, these programs typically provide fixed rate, subordinated loans for real property, machinery and equipment, and furniture, fixtures and equipment. Most require the borrower to create one new job for every $25,000 of funding.
Ohio Workforce Guarantee Program: Supports companies making investments in facilities, equipment and training by providing direct financial support for eligible tuition and training costs.
Ohio One Stop Workforce Centers: One-Stop Centers offer assessment services including identifying and screening employees; on and off-site training programs; and administers grants for incumbent workers, targeted industries and on-the-job training.
Sales Tax Exemption on Building Materials combined with On/Off Balance Sheet Leasing: Working with an Ohio port authority exempts projects from Ohio sales tax on building materials. Other financing and tax incentives can flow-through the port authority to benefit the company, and the company can still utilize a private sector real estate developer/owner/lessor if it so chooses.