Update: InvestOhio– February 02, 2012

The state of Ohio has made some important updates to the InvestOhio Program since its launch in early December. The four latest developments are summarized below. Find more about the general program in one of our previous communications.

1. Representatives of the state have taken the position that a distribution from a qualifying small business that is subsequently re-contributed may not qualify for the credit. If the entity can establish through books and records that it regularly makes distributions of profits, the subsequent re-contribution could qualify for the credit.

2. Ohio has indicated that in tiered entity structures, one entity can make a contribution to another entity and qualify for the credit. The two business entities would register and apply for the credit; however, Ohio will require the entity to list out the individual owners that will ultimately receive the credit even though the individual owners themselves would not register.

3. To document an equity investment, Ohio has indicated that it will accept the following:

  • Stock certificates

  • Membership certificates

  • Partnership agreements

  • Corporate minutes

  • Documentation of the entity’s ownership structure immediately before and immediately after the investment or other legal documents

​4. Ohio is still working on a process within the Ohio Business Gateway that will allow for the electronic submission of documentation of the equity investment and of the use of the funds for a qualifying investment. The state has indicated that the 30-day time frame will start the later of when the process is up and running or when the investment is made or the funds used.

Contact a member of our SALT group for assistance in evaluating this program and its potential place in your overall investment and tax strategy.

Note that guidance regarding InvestOhio continues to be updated frequently. Information provided by Cohen & Company is believed to be accurate as of the date of publishing. Consult one of our staff for the latest developments prior to taking any course of action.

This communication is for information only, and any action should only be taken after a detailed review of the specific situation and appropriate consultation.

Notwithstanding that these materials do not constitute legal, accounting or other professional advice, as may be required by United States Treasury Regulations and IRS Circular 230, you should be advised that these materials are not intended or written to be used, and cannot be used by you or any other person, for the purpose of avoiding penalties that may be imposed under federal tax laws. No written statement contained in these materials may be used by any person to support the promotion or marketing of or to recommend any federal tax transaction(s) or matter(s) addressed in these materials, and any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor with respect to any such federal tax transaction matter.