Ohio Research and Development Investment Tax Credit

Program overview

Because Ohio taxes businesses through a gross receipts based commercial activity tax rather than a corporate income tax, its research incentive is structured as a credit against that tax. The credit equals a percentage of the amount by which qualified research expenses in Ohio exceed the average of the three preceding years. Ohio also offers a separate loan program for research and development equipment purchases and a sales tax exemption for qualifying research property.

Eligibility

Persons subject to the Ohio commercial activity tax with qualified research expenses, as defined under IRC Section 41, incurred in Ohio.

Benefits

Non-refundable credit against the Ohio commercial activity tax.

Ohio IDR questions

What an examiner is likely to ask about this credit. S1–S7 apply to every state claim; the rest come from this program's own rules.

1. S1Confirm the research was physically performed within Ohio.
2. S2Provide the Ohio qualified research expense calculation and base amount.
3. S3Reconcile Ohio expenses to the federal Form 6765.
4. S4Show how wages and supplies were apportioned between Ohio and other locations.
5. S5Provide the Ohio return and credit schedule for each year claimed.
6. S6Show the carryforward schedule for unused Ohio credits.
7. S7Confirm the entity claiming the credit is the entity subject to Ohio tax.

Draft questions for illustration, reviewed by a specialist before any engagement.