Ohio is a crazy state when it comes to income taxes. Every city has its own local tax rates and tax returns. They also have a Gross Receipts tax called CAT tax and have some of the most expensive property tax rates in the country. There is no other state in the union has as many tax return filings as Ohio.
State Taxes at a Glance – Ohio
| Type of Tax | 2024 |
|---|
| Individual Rates | 0.00% to 3.50% |
| Corporate / Business Tax Rates | None |
| Gross Receipts Tax | Yes – CAT Tax of 0.26% |
| Sales Tax | 7.24% (average) |
| Property Taxes | 1.58% as a percentage of primary home |
| Estate or Inheritance Tax | None |
State Income Taxes in Ohio
The state of Ohio does have an individual income tax. Like most states with income tax, it is calculated on a marginal scale whose range is from 0.00% to 3.55%. Like the state of North Dakota, the legislature lowered the tax rates in recent years.
The rates are:
- 0.00% tax rate – income less than $26,050
- 2.75% tax rate – income above $26,050, but less than $100,000
- 3.50% tax rate – income above $100,000+
Unlike most states, Ohio cities have their own individual city tax returns (similar to the Manhattan Island Tax in New York). The average local city tax in Ohio is 1.56%.
State Gross Margins Business Taxes in Ohio
The state of Ohio does not have a business income tax; however, it does have a Gross Margins Tax called the Commercial Activities Tax (CAT).
In 2024 the Ohio legislature modified the CAT for business that have over $3,000,000 in Revenue in Ohio. That means if you make under $3M in Taxable Gross Receipts, you pay zero tax, and anything above $3M+ is taxed at 0.26%. Here is an image directly from the Ohio Department of Taxations Website:
Sales and Property Taxes in Ohio
Sales Tax – like many states, Ohio has multiple tax rates. One at the state level and another at the local level. The state rate is 5.75% the average local rate is 1.49% (total average rate for Ohio Sales Tax is 7.24%).
Property Taxes in Ohio – the average property tax rate for residential property in the state of Ohio is 1.58%, making it one of the more expensive places to own property in the country (the national average is 1.08%).
Ohio BMV (DMV) fees
Ohio’s DMV is actually a BMV (Bureau of Motor Vehicles.) Ohio’s BMV fees are based on how old the vehicle is, not its value. Therefore, the BMV fees are not deductible. To learn more, here’s a link to the Ohio DMV website.
Ohio Domicile
Anybody that has at least 213 “contact periods” within the state of Ohio is considered a resident.
You must meet all three conditions to be considered within a “Contact Period” in Ohio
- You have an abode outside of Ohio
- You are away overnight from your abode
- While away from your outside abode, you spend any portion of two consecutive days in Ohio
Ohio Tax on Social Security Benefits
Even though there is a state income tax in Ohio, they do not assess state income tax on social security benefits.
Payroll Taxes in Ohio
Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:
- Wage Base – Ohio has a wage base of $9,000
- UI Rates – range from 0.08% to 9.80% which is very high for UI
- Schedules – Ohio has multiple rate schedules regarding UI
Ohio Business Entities – LLCs
Ohio is one of the least expensive states to open an LLC. In fact, it is one of a few states that has no annual LLC fee. Here are some important facts:
- Ohio does not have an annual LLC fee. Yay!
- When you register with the state, you pay a one time fee of $99
- Secretary of State of Ohio website – click here
- Commercial Activity Tax website – click here
Ohio Tax Contact Phone Numbers
Important phone numbers for the Ohio Department of Taxation:
- Website: tax.ohio.gov
- Phone# for Individuals – (800) 282-1780
- Phone# for Businesses – (888) 405-1055