Ohio Research and Development Investment Tax Credit

Program Overview

Ohio provides a research and development credit against the Commercial Activity Tax (CAT). The credit is based on the amount by which qualified research expenses incurred in Ohio exceed the average of the three preceding years, subject to applicable requirements and limitations. Ohio also provides separate incentives related to research and development, including a loan program for qualifying research and development equipment purchases and a sales tax exemption for qualifying research property.

Eligibility

• Persons subject to the Ohio Commercial Activity Tax may qualify.
• Taxpayers must have qualified research expenses incurred in Ohio.
• Qualifying research activities and expenses must meet the applicable requirements, including the relevant federal IRC Section 41 definitions.
• Additional requirements may apply to the separate equipment loan and sales tax exemption programs.

Benefits

• Non-refundable credit applied against Ohio Commercial Activity Tax liability.
• Credit is based on the increase in qualifying Ohio research expenses above the applicable three-year average.
• Separate incentives may be available for qualifying research and development equipment purchases.
• A sales tax exemption may be available for qualifying research property, subject to applicable requirements.