Megaproject

Overview

Ohio recently approved a significant incentive package available to select projects that involve large investments in job creating assets. In 2021, the Ohio legislature included within House Bill 110, the state’s fiscal year 2022-2023 biennium budget, a new “Megaproject” designation in the state’s Job Creation Tax Credit program. 

A Megaproject is a project in Ohio with at least $1 billion in capital investment or $75 million per year in new payroll, and each Megaproject will have a “Megaproject Operator” entitled to receive this new incentive package. In addition, each Megaproject can also have one or more “Megaproject Suppliers,” which are other entities in the supply chain that provide products to a qualified Megaproject. 

Each Megaproject Supplier must make at least $100 million in capital investment and $10 million per year to qualify for certain benefits in the incentive package. All Megaproject payroll must have average wages of at least 300% of the federal minimum wage to qualify as eligible payroll.

Later, in 2022, in part in reaction to the announcement by Intel Corporation that it will be locating a new $20 billion semiconductor wafer factory as a “Megaproject” in Licking County, Ohio, the Ohio legislature passed House Bill 687. House Bill 687, in part, enables Megaproject Operators and Megaproject Suppliers to access additional incentives under certain circumstances associated with the Intel Corporation Megaproject, including the expansion of each of the following:

1. income tax abatements;
2. property tax abatements under the Community Reinvestment Area program;
3. commercial activity tax exemptions; and
4. additional sales and use tax exemptions for certain new buildings.

House Bill 687 also differentiates between Megaproject Operators and Megaproject Suppliers that work with the Intel Corporation Megaproject and those that do not.  In doing so, it creates additional incentives for Intel Corporation and certain Intel Corporation-related suppliers.