Ohio Opportunity Zone income tax credit legislation introduced
News from the Governors biennial budget March 13, 2019
Under the governor’s proposal, Ohio would provide a 10 percent, nonrefundable income tax credit to those who invest in the state’s Opportunity Zones.
The Executive Budget proposes a nonrefundable personal income tax credit equal to 10 percent of capital gains reinvested by individuals into qualified Opportunity Funds operating within Opportunity Zones located in Ohio. The proposal uses the recently-enacted federal Qualified Opportunity Zone tax incentive as a tool to leverage additional investment into areas of Ohio that have experienced economic challenges. This program, enacted by the Tax Cuts and Jobs Act of 2017, provides a substantial federal tax benefit to individuals making long-term investments in qualified funds operating in Opportunity Zones, which exist in thousands of eligible designated areas across the nation (i.e., the zones are Census tracts meeting designated economic distress criteria).
Because the federal tax incentive is deferred (after the investment has been held for a required minimum number of years), an early stage Ohio investment credit is expected to provide an important inducement to steer investments to Ohio zones that may have otherwise gone to other purposes or to non-Ohio zones, and thereby spur new business activity in those Ohio communities in which the more than 300 Ohio zones are located.