Ohio Governor Mike DeWine (R) is proposing to expand a job creation tax credit to include small businesses.
A provision in the governor's proposed fiscal 2022-2023 budget would expand the state's refundable job creation tax credit to allow small businesses to qualify for the credit on projects involving fewer than 10 new employees. The credit is currently available only for projects that hire at least 10 new employees.
The credit is available to businesses that demonstrate that their projects would increase their payrolls and benefit the state’s economy, and show that the credit is a major factor in their decisions to proceed with the projects, according to Section 122.17 of the Ohio Revised Code.
Expanding the criteria to allow smaller projects to qualify for the credit would allow up to $25 million in credits to be claimed annually, according to the budget. The expansion would not affect tax revenue in fiscal 2022 but would decrease revenue by $10 million in fiscal 2023, the budget said.
The budget would also invest more than $1 billion in one-time spending for the Investing in Ohio Initiative to support small businesses and communities, attract new residents and businesses, and grow the state’s skilled workforce, according to a February 1 release. DeWine said during a press conference that day that the large investment is possible because of cost-saving steps the state took at the beginning of the pandemic, including freezing state government spending, reducing the state workforce, and refinancing state debts.
The governor also said that his plan “will protect against any tax increases on small business, and any tax increase period.”
According to the release, small businesses hurt by the COVID-19 pandemic would receive $460 million in grants, including $200 million for bars and restaurants, $150 million for Small Business Relief Grant applicants, $50 million for the lodging industry, $40 million for indoor entertainment venues, and $20 million for new businesses.
In a February 1 statement, Policy Matters Ohio blasted the budget for proposing to spend $50 billion in a campaign to attract new residents to the state but doing nothing to rectify the “upside-down tax system” in which “the wealthiest Ohioans pay a much smaller share of their income than people with the lowest incomes do.”
“By leaving our upside-down tax code in place, DeWine missed an opportunity to lay the groundwork for long-lasting prosperity," the release said.
DeWine did not respond to a request for comment by press time.