Ohio, like all state economic development programs, require substantial compliance requirements. As an example, annual reporting requirements compliance exist tied to the Ohio Job Creation Tax Credit as well as the state of Ohio’s two property tax abatement programs- Community Reinvestment Area (CRA) and Enterprise Zone (EZ) programs. These program’s annual reports are due in March and the Montrose Group would be glad to discuss how our firm can assist your company or community to make meet state economic development incentive requirements through these annual reports.
The Ohio Job Creation Tax Credit Program requires taxpayers to annually submit to Development a report detailing information pertaining to the taxpayer’s project. Complete annual reports must be submitted by March 1 each year. The Ohio Department of Development requires annual progress reports to be filed for the year in which the tax credit begins and consecutive years throughout the term of the tax credit. The annual progress report is filed online using the link in the dropdown menu on the left. Information requested in the annual progress report includes the number of full-time equivalent employees for the project; total payroll for the project; Ohio employee payroll for the project; income tax revenue for the project; the amount of relocated payroll for the project during the tax year; and other information Development deems appropriate Taxpayers who fail to submit a complete annual report by the deadline shall be assessed a $500 late fee for each ensuing calendar month until the report is filed and may be subject to other remedies. Upon verification of information submitted in the annual progress report, a tax credit certificate is issued to the taxpayer.
The 2021 EZ Annual Report includes two separate reporting requirements:
- Zone Report to catalog the aggregate activity in the EZ. This report must be completed every year, even for Enterprise Zones with no active exemptions; and
- Company Reports for active exemption agreements. If an EZ does not have any active commercial or industrial exemption agreements, completion of a Company Reports is not required.
Each EZ created prior to January 1, 2022 and certified by Development must complete and submit an annual report form that covers all exemptions in the EZ through December 31, 2021. Completing the EZ annual report is done on an on-line portal to the Ohio Department of Development. No paper or emailed copies of the Zone Report or Company Reports will be accepted. EZ Managers are encouraged to retain signed copies of the completed worksheets they receive back from business owners that are recipients of EZ agreements, but submission to the Ohio Department of Development is only to be done through the EZ Annual Reporting Module as noted above. Company Reports should be filed before you complete the Zone Report. This is due to the Zone Report requiring aggregated information from all the Company Reports, and the 2021 EZ Annual Report must be filed with Development by March 31, 2022.
CRA annual reports of course differ if they are Pre-1994 CRA compared to a Post-1994 CRA. Pre-1994 CRAs were created before 1994 and they offer a 100%, 15 year real property tax abatement if a company creating jobs locates in a valid Pre-1994 CRA. Pursuant to Ohio Revised Code (ORC) Section 3735.69(B), any municipal corporation or county that has created a CRA prior to July 1, 1994 is required to submit to Development an annual status report summarizing the activities and projects that have been granted a real property tax exemption within the CRA. This report is to address active CRA exemptions during 2021 including projects certified by the Housing Officer to the County Auditor through December 31, 2021. Communities must complete one report form for each Pre–1994 CRA in their jurisdiction. Please note that pursuant to ORC Section 3635.672, CRAs created after July 1, 1994 and Pre-1994 CRAs invoking the new rules are required to be confirmed by Development and receive a more extensive reporting format. In completing the 2021 Pre-1994 CRA Annual Report, the Ohio Department of Development asks the communities to provide the best available information for the period ending December 31, 2021. In many instances, the property owner or tenants may need to be contacted to verify information, including job creation figures. The 2021 Pre-1994 CRA Annual Report should be submitted to Development by March 31, 2022.
The 2021 CRA Annual Report (for Post 1994 CRAs) includes three separate required reporting requirements:
- An Area Report to catalog the aggregate activity in the CRA- this report needs to be completed every year, even for CRAs with no active exemptions.
- Company Report for active commercial or industrial exemption agreements, (if the CRA has active commercial/industrial exemptions); and
- Residential Status Report for residential incentives if the CRA offers residential incentives and has at least one active residential exemption.
Each CRA created prior to January 1, 2022 and confirmed by the Ohio Department of Development (Development), must complete and submit an annual report form that covers all exemptions in the CRA through December 31, 2021. Entries for the report include: local incentives annual report entry; login/password; electronic filing with retention of paper copies recommended; company reports to be filed before the area report is; and residential status reports to be included as well. The 2021 CRA Annual Report must be filed with the Ohio Department of Development by March 31, 2022.
Ohio’s economic development programs require companies and communities to comply with reporting requirements to gain tax benefits but also to comply with incentive agreements.
Contact Dave Robinson at [email protected] if the Montrose Group can assist with any economic development incentive compliance reports.