City of St. Marys Incentive Programs
The City of St. Marys has established several incentive programs to help businesses. These programs follow both state and local guidelines that will offer assistance to existing and new business.
Community Reinvestment Area Program (CRA)
The CRA is an area in which property owners can receive real estate tax incentives by investing in improvements to their real estate. St. Marys has a large area of the corporation limit designated as a Community Reinvestment Area. The program allows eligible projects to receive 100% tax abatement for a period of 10 years.
Enterprise Zone Tax Abatement Program
The entire corporation limit of the City of St. Marys is included in the Enterprise Zone. The Enterprise Zone is used for industrial projects and provides variable tax abatements for eligible projects.
Revolving Loan Fund
The City of St. Marys offers a low interest Revolving Loan Fund administered locally to be used in conjunction with private lenders for either new or expanding qualified business. Project loans can assist financing up to 40% of a project’s cost with a maximum of $25,000/per job created. Interest rates are determined on a project by project basis with a rate typically fixed below current market rates.
In addition to local incentives, other programs are offered on both a regional and statewide basis to assist existing businesses to grow and help establish new business. A summary of several of the incentives is included below.
166 DIRECT LOAN
Direct loan financing is available to help finance manufacturing and other eligible facilities. Eligible uses for funding including: new building construction, building acquisition, and acquisition of machinery and equipment. Amounts of financing are usually set at 30 percent of the project cost to a maximum of $1 million, subject to an increase by the Director of Development, with a minimum loan amount of $350,000. The rate is fixed (currently at 3 percent), with terms similar to those of commercial bank financing. Eligible projects must involve significant job creation or retention.
OHIO ENTERPRISE BOND FUND
Revenue bond financing is available through this S&P AA- (double Aminus) rated fund, whereby proceeds from the sale of bonds is loaned to companies for fixed rate, long-term capital asset financing. Rates are fixed depend on the type of bond issued, while terms are between 7 to 10 years for equipment and 15 to 20 years for real estate. Up to $10 million in financing is available through this program.
RESEARCH AND DEVELOPMENT INVESTMENT LOAN FUND
Direct loan financing of between $1 million and $25 million is available for projects primarily engaging in research and development activity. Rates are fixed (currently at 3 percent), with terms similar to those of commercial bank financing. Companies receive a dollar-for-dollar, nonrefundable Ohio commercial activity tax credit for all principal and interest payments during the year.
JOB CREATION TAX CREDIT
A refundable tax credit to companies creating at least 25 new full-time jobs (within 3 years) in Ohio. The credit may also be available for certain high-wage industries creating 10 or more new full-time jobs within three years. The refundable tax credit is measured as a percentage of the state income tax withholdings for all new employees hired under the program, and is applied toward the company’s commercial activity tax liability. Should the amount of the credit exceed the company’s Commercial Activity Tax liability for any given year, the difference is refunded. Approved projects generally range between a 25 and 55 percent credit for a period of five to seven years. The business must apply for the credit before committing to the project.
JOB RETENTION TAX CREDIT
The Job Retention Tax Credit is a non-refundable tax credit to companies retaining at least 1,000 full-time jobs in Ohio. Companies must also commit to new fixed-asset investment of either $100 million, if the average wages of the retained jobs exceeds 400 percent of the federal minimum wage (equal to $20.60 per hour), or $200 million, if the average wages of the retained jobs does not exceed 400 percent of the federal minimum wage. The credit is measured as a percentage of the state income tax withholdings for all employees retained under the program. Approved projects generally range up to 75 percent for 10 years. The business must apply for the credit before committing to the project.
RESEARCH AND DEVELOPMENT INVESTMENT TAX CREDIT
The Research and Development Investment Tax Credit is a non-refundable Ohio commercial activity tax credit for all investment in qualified research expenses incurred in Ohio. Qualified research expenses are based on Section 41 definitions in the United States. Internal Revenue Code and include expenses for both in-house and contract research expenses. The amount of the credit is based on 7 percent of the amount of all qualified investment in a specific year. The credit can be carried forward for up to seven years.