Decoupled 5/6 §168(k) Addback + Subsequent-Year Subtraction
Ohio’s Unique State Recovery Mechanic
2.75% Flat Individual (New for 2026) · No Corp Income Tax (CAT on Gross Receipts >$6M)
Competitive Combined Profile
22–35% Typical Reclassification
Ohio Building Value into Short-Life Assets
All Commercial Asset Classes
Statewide Ohio
The Basics
What Cost Segregation Does for Ohio Property Owners
A cost segregation study identifies building components HVAC systems, specialty flooring, parking surfaces, interior finishes, exterior lighting that qualify for accelerated depreciation on 5-, 7-, or 15-year schedules rather than the default 27.5-year (residential rental) or 39-year (commercial) building schedule. Front-loading those deductions increases first-year cash flow and lowers current-year federal taxable income. In Ohio, the federal benefit works the same way it does anywhere the One Big Beautiful Bill (OBBBA, P.L. 119-21) permanently restored 100% bonus depreciation for qualified property placed in service after January 19, 2025, and that federal benefit applies to Ohio properties in full. State-level treatment is where Ohio is different: Ohio requires an addback of federal §168(k) bonus depreciation and §179 expense in excess of $25,000 (per R.C. 5747.01(A)(17) and (18)). The addback is calculated as 5/6 of the depreciation (or 6/6 in NOL years, or 2/3 if Ohio employer withholding increased sufficiently). The added-back amount is then deducted in subsequent years generally 1/5 in each of the next five tax years. Net Ohio benefit is preserved; timing is spread over six years.
Federal Deduction Amplified by Ohio’s Newly Competitive Rate Structure
Ohio’s Tax Landscape: Why Cost Segregation Matters Here
Individual Income Tax
2.75% flat rate for 2026 on income over $26,500 (reduced from 3.125% top in 2025 via HB 33/state budget). Ohio joined the flat-rate ranks in 2026 one of eight states with flat individual income tax.
Business Income Tax
3.0% flat on Ohio business income (unchanged) with the Business Income Deduction of up to $250,000 (single/joint) still available.
Corporate Income Tax
None. Ohio has no state corporate income tax on C-Corps.
Commercial Activity Tax (CAT)
Ohio imposes CAT on gross receipts. The first $6 million of gross receipts is exempt (increased from $3M for 2025 and earlier years). Above the $6M threshold, the CAT rate is 0.26%. Applies to gross receipts, not income not affected by depreciation deductions.
Bonus Depreciation Conformity
Decoupled. Ohio requires an addback of federal §168(k) bonus depreciation and §179 expense in excess of $25,000 (per R.C. 5747.01(A)(17) and (18)). Standard addback is 5/6 with 1/5 subtraction over each of the next five years (6-year total recovery). NOL-year addback is 6/6. Certain job-growth-tied taxpayers get 2/3 addback.
§179 Expensing
For Ohio, §179 in excess of $25,000 is added back at the same fraction as bonus depreciation, then recovered over subsequent years.
Municipal Income Taxes
Many Ohio cities and villages impose their own municipal income taxes (Columbus, Cleveland, Cincinnati, Toledo, etc.) separate from state income tax. Rates typically 2%–2.5%.
Property Tax
~1.30% effective on owner-occupied housing. A separate lever from income tax.
§481(a) Catch-Up
For Ohio properties owned more than a year without a study, an automatic accounting-method change (Form 3115 under Rev. Proc. 2015-13 and its updates) captures all missed depreciation into the current tax year at the federal level no amended returns required.
Every Commercial Asset Class in Ohio
Ohio Property Types Where Cost Segregation Delivers
Semiconductor & advanced manufacturing
Intel’s $28B+ Ohio One semiconductor fab under construction in Licking County (Columbus metro) is one of the largest single semiconductor investments in U.S. history. Honda EV Hub (central Ohio) Ohio is one of the country’s largest automotive manufacturing states.
Automotive & transportation manufacturing
Honda (Marysville, East Liberty, Anna), GM (Toledo, Defiance), Ford (Lima, Cleveland), plus dozens of Tier 1/Tier 2 supplier facilities across the state.
Corporate headquarters & financial services
Cleveland (KeyBank, Sherwin-Williams, Progressive Insurance), Cincinnati (Procter & Gamble, Kroger, Fifth Third, Cintas, Macy’s), Columbus (Nationwide, Huntington Bancshares, JPMorgan). Class A office property.
Healthcare & medical office
Cleveland Clinic (one of the country’s largest healthcare systems), University Hospitals, Nationwide Children’s, Cincinnati Children’s, OhioHealth, ProMedica corridors.
Toledo glass & polymer
Owens Corning, Libbey Glass, Owens-Illinois, plus Youngstown/Akron polymer industry (Goodyear, BF Goodrich legacy).
Data centers
Columbus metro (particularly New Albany), Cincinnati, and Cleveland data center corridors. Amazon Web Services, Facebook/Meta, Google significant investments.
Multifamily
Columbus metro (Ohio’s fastest-growing multifamily market, driven by Intel-fueled demand), Cleveland metro (particularly downtown revitalization), Cincinnati, Dayton, and Akron markets.
Hospitality & tourism
Cedar Point (Sandusky), Kings Island (Cincinnati metro), Rock and Roll Hall of Fame (Cleveland), plus Amish country and Lake Erie tourism.
Retail & mixed-use
Statewide retail centers plus mixed-use developments in Columbus, Cleveland, and Cincinnati metros.
Investment residential
5+ unit properties eligible for cost segregation.
Not sure whether your Ohio property qualifies? Request a free benefit analysis we’ll tell you honestly.
Credentialed. Independent. Nationwide.
Why The Ambrose Group?
MAI-certified appraisers, in-house engineer
The IRS prefers engineering-based studies over rule-of-thumb estimates. Our in-house engineer conducts the analysis, reviews construction documents, and physically identifies reclassifiable components. Many providers estimate; we don’t.
IRS-compliant methodology
Every Ambrose study follows the IRS Cost Segregation Audit Techniques Guide (ATG, Publication 5653).
30+ years of nationwide experience
Headquartered in Texas, serving Ohio and all 50 states.
Full audit support
Every study includes documentation and audit support at no additional charge.
CPA-ready reports
We deliver a complete reclassification package your CPA can apply directly, including the depreciation detail your CPA needs to file the Ohio §168(k) 5/6 addback and manage the 5-year 1/5 recovery schedule (or 6/6 NOL-year addback, or 2/3 job-growth-tied addback as applicable).
Single-property to multi-state portfolios
Whether you own one Ohio commercial building or a portfolio spanning multiple states, we scale the engagement to fit.
Real Numbers
What First-Year Savings Might Look Like in Ohio
Results depend on property type, cost basis, construction year, and applicable depreciation rates and we run a free benefit analysis before you commit to a study so you can see projected numbers first.
As a reference point, an Ambrose Group engagement on a $2.9M commercial property delivered $657,692 in first-year depreciation increase and $230,192 in first-year tax savings. In Ohio specifically, the federal Year 1 savings apply fully. Ohio state Year 1 benefit is 1/6 of the federal bonus (100% federal deduction − 5/6 Ohio addback), plus 1/5 of the addback recovered in each of the next 5 years so the total Ohio benefit is preserved, just timed over 6 years. Given Ohio’s new 2.75% flat individual rate and 3.0% business income rate, the federal side is where Year 1 economics primarily live.
Get Started
Free Ohio Cost Segregation Benefit Analysis
Tell us about your Ohio property asset type, acquisition or construction cost, when it was placed in service and we’ll run a free benefit analysis showing projected first-year depreciation and tax savings before you commit to a study.
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Right approach for your property type
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Federal benefit modeled + Ohio 5/6 addback / 5-year recovery timing modeled
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Clear read on the study’s projected ROI
Prefer to talk?
(713) 688-7733
The Ambrose Group headquarters, Jersey Village, TX (serving Ohio and all 50 states).
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How It Works Ohio & Nationwide
Our Cost Segregation Process
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Cost Segregation in Ohio
Frequently Asked Questions
Does Ohio conform to federal bonus depreciation rules?
No but with a partial-recovery mechanic. Ohio requires an addback of federal §168(k) bonus depreciation and §179 expense in excess of $25,000 (per R.C. 5747.01(A)(17) and (18)). The standard addback is 5/6 of the depreciation (or 6/6 in NOL years, or 2/3 if the taxpayer sufficiently increased Ohio employer withholding). The added-back amount is then deducted in subsequent years generally 1/5 in each of the next five years. Your federal Year 1 tax savings from a cost segregation study are fully preserved; Ohio state benefit is spread over six tax years.
What is Ohio’s income tax structure for 2026?
Ohio adopted a flat 2.75% individual income tax rate for tax year 2026 (income over $26,500) down from the 3.125% top rate in 2025. Business income (from pass-through entities) is taxed at 3.0% flat, with the Business Income Deduction of up to $250,000 preserved. Ohio has no state corporate income tax on C-Corps.
What is Ohio’s Commercial Activity Tax (CAT) and does it affect cost segregation?
Ohio’s CAT is a tax on gross business receipts. As of 2024, the first $6M of gross receipts is exempt (increased from $3M for 2025+), and the rate above that threshold is 0.26%. Cost segregation reduces income tax through accelerated depreciation CAT operates on gross receipts, so it is not affected by depreciation deductions.
What Ohio commercial property types benefit most from cost segregation?
Intel Ohio One semiconductor fab and adjacent facilities, Honda and other automotive manufacturing operations, Cleveland Clinic and other major healthcare systems, Columbus/Cleveland/Cincinnati corporate office, Toledo glass and polymer manufacturing, and Columbus-metro multifamily (Ohio’s fastest-growing market driven by Intel demand). Semiconductor and advanced manufacturing typically deliver the strongest results due to heavy specialty equipment content.
Can I do a cost segregation study on an Ohio property I’ve owned for years?
Yes. A §481(a) adjustment via an automatic accounting-method change (Form 3115 under Rev. Proc. 2015-13 and its updates) lets you capture all missed depreciation from prior years into the current tax year without amending past returns. Especially valuable for long-held Ohio automotive manufacturing, healthcare, and Cleveland/Cincinnati corporate office properties.
How do you do a cost segregation study on an Ohio property when you’re based in Texas?
Cost segregation is governed by federal tax law, so the methodology is identical regardless of state. Our engineer works either through an in-person Ohio site visit or, for well-documented properties, a virtual site inspection using high-definition video, construction documents, and interactive tools. Both are IRS-compliant.
What construction era of Ohio property produces the strongest cost segregation outcomes?
Properties placed in service since 1987 are eligible under current IRS guidance, and studies limited to the last 7–10 years tend to deliver the strongest ROI. Intel Ohio One fab construction, Honda EV Hub buildout, Columbus-metro multifamily boom, and Cleveland/Cincinnati downtown revitalization have produced substantial newer commercial property in the ideal window.
Do Ohio municipal income taxes affect the cost seg decision?
Ohio’s many municipal income taxes (Columbus 2.5%, Cleveland 2.5%, Cincinnati 1.8%, Toledo 2.25%, etc.) apply on top of the state 2.75% flat rate for residents/workers in those jurisdictions. Cost segregation reduces income at the federal level (via §168(k)) and via subsequent-year recovery at the Ohio state level. Some municipal taxes may follow the state depreciation calculation; consult with your CPA on specific city treatment.
What documentation do you need for an Ohio cost segregation study?
Purchase or construction cost documentation, a current depreciation schedule from your CPA, construction plans or specs (when available), any prior appraisals, and for renovation studies improvement records. Because Ohio applies the 5/6 (or 6/6 or 2/3) addback mechanic, your CPA will need the detailed asset schedule to manage the multi-year state recovery. We provide it as part of the standard deliverable.
Can you handle Ohio multi-property portfolios? How long does a study take?
Yes we regularly run cost segregation studies across multi-state and Ohio-only portfolios. Common for Ohio automotive Tier 1/Tier 2 supplier operations with multiple plants, Cleveland Clinic and Cincinnati Children’s healthcare operators, Columbus data center operators, and multifamily portfolio owners in Columbus, Cleveland, and Cincinnati. Typical study timeline is 4–8 weeks per property; complex semiconductor and automotive manufacturing facilities take longer proportional to the specialty-equipment cataloging effort.
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We live by our motto: “Everything we do is driven by the relationship, not the transaction” and we mean it. Whether you have an Ohio property to evaluate or a multi-state portfolio to review, we’re here to help. Contact our real estate firm.