Successful businesses looking to expand our often eager for investment opportunities. Reinvesting capital that the business has generated in new facilities, improved machinery or other company needs can increase profits and minimize tax obligations. External investments can also lead to lucrative increases in business capital.
Companies in Ohio looking to mitigate income tax obligations may have special opportunities if they choose to invest locally. Ohio now partners with the United States Treasury to run special investment funds. These funds relate to over 300 specially designated Opportunity Zones across the state. What should businesses know about these Opportunity Zones?
Investments can yield valuable tax benefits
There are numerous low-income communities across Ohio that need investment to truly thrive. A partnership with the United States Treasury to spur local investment in such areas has created unique opportunities in more than 300 areas designated as Ohio Opportunity Zones.
Businesses can invest liquid capital in the Ohio Qualified Opportunity Fund. The Fund uses those investments to help specific properties. The investor can receive a 10% tax credit based on the amount of funds invested. The tax credit can help offset income tax liability but is non-refundable. A single taxpayer can invest up to $2 million every two years, earning up to $200,000 in tax credits.
Taxpayers can invest in Opportunity Zones in local urban areas or rural communities. There are more than three dozen Opportunity Zones in the greater Columbus area and others nearby in rural communities, like Buckeye Lake. Not only does this program offer tax benefits to investors, but it may also help improve the economic circumstances of people in some of the lower-income parts of the state.
State-run programs, including those that cooperate with federal agencies, can provide numerous valuable opportunities for businesses and individuals with capital to invest. Those with information about these programs can potentially derive financial benefits while simultaneously helping to improve the local economy.
Taking advantage of economic incentives can help a business increase its profits, decrease tax liabilities and potentially even bolster its reputation by investing in local development. Executives and business owners operating organizations in Ohio may want to consider Ohio Opportunity Zone investments as one means of minimizing tax liabilities.