New Resource for Ohio Small Business and Investors

What is InvestOhio?
InvestOhio is a new tool for helping Ohio small businesses gain the capital they need to succeed and create jobs. Through the program, investors putting up to $10 million into eligible small businesses may receive a 10 percent income tax credit if the investment is held for two years.

To qualify, a company must employ at least 50 employees in Ohio or a majority of its employees in Ohio, and must have either assets of $50 million or less or sales of less than $10 million. The business must invest an amount equal to the taxpayer's investment within six months of receiving it. The qualifying investments must be for:

• Equipment, tangible property or real property in Ohio
• Intangible Assets—patents, copyrights, trademarks, license-used in Ohio
• Motor Vehicles purchased and registered in Ohio used for business purposes
• Compensation for new or retrained employees, excluding owners, managers, officers

Examples of how InvestOhio might work for you:

1. In October 2011, Mr. Green invests $20,000 for an equity interest into ABC Inc., which qualifies as an eligible small business. ABC Inc. uses the investment to purchase a new piece of equipment for its business. Assuming the investment is held for two years and the proper qualification and certification steps have been taken, the investment is qualified for a $2,000 credit against Mr. Green's 2013 Ohio taxes.
2. Mrs. Smith owns an eligible small business. She invests $5,000 into the business to hire a new employee. Assuming all other qualifications are met, this investment will qualify Mrs. Smith for a $500 credit when the holding period is met.
3. Mr. Jones is the sole owner of two companies. The first company has all the employees and runs the operations of the business and the second company has no employees and holds the real estate of the business. Mr. Jones wants to buy a new building for the business. He invests $150,000 into the real estate company to purchase the new building. The investment does NOT qualify for the credit because the real estate company has no employees.

Benefit of InvestOhio
The $100 million tax credit program will leverage at least $1 billion in private investment for Ohio companies over the biennium. As word spreads about the program to investors, InvestOhio will help attract more businesses to the state, create jobs, and improve Ohio's competitive position. This amount is being capped at the first $1 billion dollars and is expected to go quickly.

Why is InvestOhio needed?

• The recent economic downturn has left many Ohio small businesses in need of capital to sustain and grow their business. Investments through the program will allow small businesses to take advantage of the economic recovery. InvestOhio encourages investors to put money back into the economy that may have been idled.
• InvestOhio supports investment in Ohio's key job-creators – small businesses. There are more than 900,000 small businesses in Ohio and their expansion is critical to the state's economic recovery. Small businesses are often the first companies to begin hiring following a recession. In addition, nearly 50 percent of the state's workforce is employed by small businesses. Sparking growth in small businesses helps boost Ohio's economy overall.
• Ohio is working to reduce its taxes in order to create a more jobs-friendly environment. InvestOhio helps improve Ohio's tax climate to facilitate economic growth and job creation.

Eligibility
Eligible companies must have less than $50 million in assets or less than $10 million in annual sales. They must meet the requirements established by the Ohio Department of Development and the Department of Taxation to participate in the program. Eligible investors must apply and register investments with the Ohio Department of Development (http://www.development.ohio.gov) to be issued an InvestOhio certificate. The tax credits are not available to investors who invest in companies based outside of Ohio.

In late September 2011, InvestOhio became law. At the time of this writing, the Investment Application Form is not yet available. Please contact Hall, Kistler at 330-453-7633 to see how we can assist you in qualifying for the tax credit.