The tax credit will apply against the corporate franchise tax through 6/30/08, and transfer to cover the Commercial Activity Tax (CAT) liabilities for tax period beginning July 1, 2008. The program will continue to be refundable.

In special circumstances, a company could create as few as 10 new full-time positions paying at least 400% of the federal minimum wage

Credits awarded to companies that are engaged at the project site primarily as a manufacturer or providing significant corporate administrative functions and can demonstrate the tax credit is a major factor in its decision to retain jobs in Ohio

Local community must also provide financial support for the project.

In special circumstances, a company could invest at least $100 million if the retained positions pay, and will continue to pay, at least 400% of the federal minimum wage.

The tax credit currently is applied against a company’s corporate franchise tax. The tax credit will transfer to cover the Commercial Activity Tax (CAT) for corporations subject to ORC Section 5733.01(G)(2) after tax year 2008.

Any excess credit not used in the taxable year in which it is earned by be carried forward for up to 7 years.

Taxpayer must invest in “Qualified Research Expenses”, defined within Section 41 of the Internal Revenue Code and includes both in-house research expenses (wages and supplies) and contract research expenses.

New investment in a taxable year must exceed business' annual average investment in Qualifying Research Expenses for the tree previous taxable years.

Tax credit available in tax year 2004, 2005, and 2006.

Training for management personnel is generally prohibited

As of July 1, 2005, the M&E Equipment Grant replaced the M&E Investment Tax Credit as the mechanism for companies to take the incentive. The M&E Equipment Investment Grant Program incentive values are calculated in the same manner at the M&E Investment Tax Credit, and therefore the annual incentive amounts previously calculated through the tax credit program will apply to the grant program. The M&E Equipment Grant program will require companies /individuals intending on taking the incentive (again – the same amounts as the annual values calculated through the M&E Investment Tax Credit program on the Notice of Intents) must file a grant request form with their tax return.

Purchases must be made by June 30, 2005 and installation must occur before June 30, 2006.

Credit exceeding $1 million must meet special requirements

Notice of Intents must still be filed with ODOD for investment made in calendar years 1995 through 6/30/05. A company’s deadline to file a Notice of Intent for any investment year is determined by the required filing date of its tax return (see the M&E Investment Credit website under “Notice of Intent Due Dates” for the deadlines).

For state franchise tax filers, the incentive is applicable to the corporate franchise tax credit during the tax’s phase out period. After the tax is eliminated, the incentive is eliminated.

For state income tax filers, the incentive can be taken against the state income tax until the term of the incentive is completed.

New investment must exceed business' annual average county investment in machinery and equipment determined by the filing year

Machinery and equipment must be new to Ohio Retooling qualifies if costs are capitalized for federal tax depreciation purposes

Investment for which tax credit is claimed must be a purchase of common stock, preferred stock, membership interest, partnership or other equity position that does not exceed $150,000

Investor must incur risk of loss which depends on the company's success for repayment

Annual dividends and interest payments combined may not exceed 10% of amount invested

Investor cannot own in excess of 5% stock in the company in which he is investing

Investor must not be delinquent in state or local taxes

transfer, or the application of a new technology Business must have gross revenues less than $1 million, or net book value of less than $1 million, at the end of most recent fiscal year

Principal place of business and 1/2 of its gross assets and employees must be in Ohio Business must have received less than $1 million in investments that have qualified for the tax credit

Direct research refers to research conducted to design, create or formulate new or better products, equipment or processes

Pure research refers to scientific or technological inquiry and experimentation in the physical sciences

This exemption will only be applicable as long as there is tangible personal property tax is assessed on inventory. Once the personal property tax is eliminated, the exemption is eliminated.

Local school board approval is required to exceed these rate and/or term limits

Reductions apply to the increase in assessed value for real property and items first-used by the business in Ohio for personal property

Note that: 1) manufacturing machinery and equipment new to the state purchased after 1/1/05 will not be taxed and 2) once personal property tax is phased out, the personal property tax incentive will no longer be applicable.

Business must finalize agreement to retain or create employment; establish expand, renovate or occupy a facility in an Enterprise Zone; and invest in new real and/or personal property prior to project initiation

Local legislative authority establishes rates and terms

In some instances, local school board approval may be required

Commercial and industrial projects must have an agreement in place prior to investment

Local legislative authority establishes project eligibility