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.
Non-Profit Organization; For-Profit Business
Eligible Recipients Detail:
Investors that invest in securities from a qualified community development entity (CDE) are eligible for tax credits. Tax credit allocation authority is awarded to Community Development Entities, who sell the credit to investors and use that money for high-impact projects.
Building Infrastructure; Last Mile Infrastructure
Eligible Purpose Detail:
For investors, the tax credit can be applied to applicable financial institutions, and foreign and domestic insurance premiums. Community Development Entities receiving investments make investments in high-impact projects or into qualifying low-income businesses in qualifying low-income communities.