Ohio · research and development · OH-RD-001
Research and Development Investment Tax Credit
Publication revised September 24, 2026. Sourcebook page 220.
Credit amount / calculation
7% of excess Ohio qualified research expenses over the average of the prior three years; nonrefundable with carryforward.
Business fit and eligible activity
Ohio's CAT-based research credit can apply to qualified research by wood-products manufacturers without a project award. Qualified research activity. Ordinary production, routine quality control and an equipment purchase alone do not qualify.
Eligibility and practical use
For forest products, research credits usually live on the mill floor rather than in a laboratory. Scanner settings, drying schedules, process-control changes, product testing, and equipment modifications can matter when the work is experimental rather than routine. A logging company has a narrower path, but equipment-control, software, or process-development work can sometimes qualify if it satisfies the same technical tests.
Illustrative business benefit
A hardwood mill spends $320,000 on a documented project to improve recovery from low-grade logs using scanner changes, controlled test runs, software adjustments, and revised sawing patterns. Assume $200,000 is ultimately treated as the relevant qualified or excess research base. At 7%, the state credit would be about $14,000 before program caps and tax-liability limits. The company would need records showing the uncertainty, alternatives tested, people involved, and results - not simply a year-end estimate of 'engineering time.'
Timing / first action
Tax-year claim: document the eligible expense, hire or placed-in-service date and meet any separate certification deadline. Identify the technical uncertainty and start contemporaneous project records before trying to calculate the credit.
Official sources
- Ohio Revised Code §122.17 (ohiohistory.org)
- Ohio Department of Development - Historic Preservation Tax Credit (ohio.gov)
- Ohio Revised Code - Research and Development Investment Credit (ohio.gov)
- Ohio Revised Code - Research and Development Investment Credit (okcommerce.gov)
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