Tax Incentive “Cheat Sheet” for Ohio School Districts

by | Feb 3, 2015 | School Finance

With the Ohio economy rebounding, we are beginning to see more and more property tax incentives being offered to businesses by local governments.  Ohio’s school districts play a crucial role in a local government’s ability to offer these incentives.  Below is a quick reference guide to the most common types of property tax incentives.  We’ve also specified when board of education approval is required prior to an incentive being awarded by a local government.  Understanding this is very important because boards of education can request to be compensated for lost tax revenue in exchange for approving an incentive.  In many cases, we are able to negotiate a deal with a local government or business where a board of education realizes no loss in revenue at all.

 Tax Increment Financing (TIF)

  • Local governments use this inventive to finance public infrastructure improvements that benefit private development
  • Exemption Term – Up to 100% for 30 years
    • BOE Approval Required – if more than 75% is exempted and more than 10 years

Enterprise Zone Agreement (EZA)

  • Designated zones within a governmental jurisdiction where businesses receive tax exemptions on eligible new investments
  • Exemption Term – Up to 100% for 30 years
    • City Provided Incentive
      • BOE Approval Required – if more than 75% is exempted and more than 10 Years
    • County/Township Provided Incentive
      • BOE Approval Required – if more than 60% is exempted and more than 10 years

Community Reinvestment Area (CRA)

  • Allows property owners (primarily residential property) within certain areas where investment has been discouraged to receive tax exemptions for investing in real property improvements
  • Exemption Term – Up to 100% for 10-15 Years depending on type of remodeling or construction
  • CRA Created Before July 1, 1994
    • BOE has no approval authority
  • CRA Created After July 1, 1994
    • Commercial & Industrial Property
      • BOE Approval Required – if more than 50% is exempted
    • Residential Property
      • BOE has no approval authority

For more information, please contact Gary T. Stedronsky at 513-421-2540 or at gstedronsky@erflegal.com