Ohio opportunity (zones) comes knocking

Written on Apr 04, 2019

OSCPA staff report

PicState Sen. Kirk Schuring, R-Canton, a previous recipient of the OSCPA Outstanding Legislator Award, has sponsored legislation authorizing a nonrefundable income tax credit equal to 10% of a taxpayer’s investment in an Ohio opportunity zone. The credits in Senate Bill 8 are in addition to existing federal and Ohio tax benefits for investments in such zones.

Even though the credit is nonrefundable, any unused credit can be carried forward for up to five subsequent taxable years. The total amount allowed to a particular taxpayer in any fiscal biennium is limited to $1 million, and the total amount of credits available for all taxpayers is limited to $50 million per biennium. Because there’s a limit, investors must apply to the Development Services Agency for the credit between Jan. 1 and Feb. 1 following the year in which an investment is made.

“What we’re trying to do here is offer an Ohio credit, so Ohioans invest their money in an Ohio-based opportunity zone that is exclusively used for economic development in Ohio,” Schuring said. “SB 8 will drive private investment dollars into areas of our state that are in dire need for an economic boost.”

The federal Tax Cuts and Jobs Act of 2017 allowed states to identify up to 25% of low-income, high-poverty census tracts to the U.S. Treasury, which made the final determination of “qualified opportunity zones.” Ohio received its full allocation of 320 census tracts (25% of 1,280 eligible tracts). These areas are also eligible for “opportunity funds” to invest in economic development, and taxpayers can receive a federal tax break if the original investment is kept for at least 10 years.

The Ohio Senate passed SB 8 31-0 on April 3 and the bill now heads to the House for further consideration.

Photo: OSCPA member Steve Pittman, CPA, of CliftonLarsonAllen, left, and OSCPA Tax Policy Director Greg Saul, Esq., CAE, right, in 2016 presented Kirk Schuring, then a state rep., with the Society’s Outstanding Legislator Award.