Ohio Community Reinvestment Area Program
Community Reinvestment Areas are areas of land in which property owners can receive tax incentives for investing in real property improvements. The Community Reinvestment Area (CRA) Program is a direct incentive tax exemption program benefiting property owners who renovate existing or construct new buildings. This program permits municipalities or counties to designate areas where investment has been discouraged as a CRA to encourage revitalization of the existing housing stock and the development of new structures.
The Ohio CRA Program should not be confused with the Federal Community Reinvestment Act, which requires lending institutions to lend within their service area. Ohio's CRA Program was created to promote the revitalization of areas where investment has been discouraged by offering property tax exemptions for any increased property valuation that would result from renovation of existing structures or new construction activities within the area. The program can be used to encourage historic preservation, residential construction and/or as an economic development tool to encourage commercial and industrial renovation or expansion and new construction.
The CRA Program was created in 1977. The program underwent major revisions in 1994. In fact, there are two types of CRA's in Ohio - those created prior to July 1, 1994 (commonly referred to as "Pre-1994 CRA's") and those after. The regulations governing each type vary considerably. In each case however, the local legislative authority with jurisdiction over the designated area determines the size, the number of areas as well as the term and extent of the real property exemptions.
The City of Groveport is divided into 5 CRA's, all of them "Pre-1994". For new commercial and industrial structures the exemption is 100% for a 15 year term and application is made upon substantial completion of the building, usually when a Certificate of Occupancy is granted.
Local Tax Credits For Job Creation
For prospective companies considering properties for which no CRA or other exemption exists, the City of Groveport, by ordinance, may negotiate and grant a refundable or nonrefundable credit against its tax on income to a taxpayer that also receives an Ohio Job Creation Tax Credit under section 122.17 of the Ohio Revised Code. Credits granted under this section are measured as a percentage of the new income tax revenue the City derives from new employees of the taxpayer and shall be for a term not exceeding fifteen years.
Before the Groveport City Council passes an ordinance granting a credit, the City and the taxpayer must enter into an agreement specifying all the conditions of the credit.
State Of Ohio Tax Incentives
The Ohio Department of Development Office of Grants and Tax Incentives (OGTI) is responsible for managing the state's business development tax incentive programs and overseeing the administrative performance of various local property tax incentive programs. Office staff also provides support to the members of the Ohio Tax Credit Authority, who are charged with the duty of reviewing and approving tax credits for job creation and retention projects through the state. The Authority consists of five members appointed by the Governor, Speaker of the Ohio House of Representatives, and President of the Ohio Senate.
OGTI staff also provides technical assistance support to communities and local elected officials that establish and administer real and personal property tax incentive programs. Such programs require the involvement of OGTI in the establishment of areas eligible to offer property tax incentives and the execution of select agreements involving the movement of assets within the state. Businesses receiving property tax incentives are required to file an annual progress report with OGTI, which is used to generate an annual program report for the Ohio General Assembly on the performance of such incentives.
Contact: Office of Grants and Tax Incentives at (614) 466-2317 or (800) 848-1300.