Ohio’s recent adopted state budget signed by its governor includes a provision that is doubling portions of the state’s Opportunity Zone (OZ) tax benefits, a move that could drive further investment into the Buckeye State from around the country by investors looking to cash in.

Amended House Bill 110, which created Ohio’s biennial budget for July 1, 2021, through June 30, 2023, doubles the amount a single taxpayer can claim in a fiscal biennium, from $1 million to $2 million. However, it retained the statewide cap of $50 million per fiscal biennium.

The state tax incentive only applies to Qualified Opportunity Funds (QOFs) that hold all their investments in Ohio.

Gov. Mike DeWine noted how the budget includes $2 billion in tax cuts over two years.

“Our new operating budget builds on the budget we launched two years ago and takes it to a higher level,” he said in a statement, adding, “This is a strong budget that invests in our people and is focused on our future.”

Local perspective

Chris Knoppe, president of CBUS OZ Funds, a Columbus-based QOF that exclusively invests in Ohio, pointed out how his state is among the most OZ friendly in the United States.

He noted how investors have received a tax credit equal to 10% of their OZ investment, and that those certificates are actually transferable, meaning they can be sold for a quick cash return.

“To my knowledge, this is a unique incentive being offered only by Ohio and it has been a powerful tool for attracting OZ capital into our state,” he told Opportunity Zone Magazine. “I have personally worked with out-of-state investors who are choosing to invest in Ohio because of the state’s OZ tax credit incentive, and I also helped them sell their certificates for cash. I’m a huge fan of the program.”

Strong returns for Ohio

Knoppe, citing recent data from Novogradac, the San Francisco-based firm that studies OZ data, noted how Ohio ranks No. 4 in the country for attracting OZ investment. The state only falls behind California, New York and Arizona. It has even surpassed Texas.

“The same study found that three Ohio cities — Columbus, Cincinnati and Cleveland — are in the top 25 cities for OZ investment,” Knoppe said. “This data supports the tremendous success of the Ohio OZ tax credit program.”

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