Ohio Tax Guide: Income, Estate and Property Taxes 2021

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Updated on Friday, July 16, 2021

Ohio can be hard to peg from a tax perspective. According to the Tax Foundation, focusing on, the Buckeye State ranks 20th among the states for state sales tax — plus, there’s no state-level estate or inheritance tax. However, the tax policy nonprofit also ranked Ohio as 8th highest for individual income taxes and its property taxes are higher than most other states.

If you’re considering moving to Ohio, a financial advisor can help you navigate the intricacies of federal, state and local taxes. Check out our list of the best financial advisors in Ohio for help finding one, or read on to learn more about taxes in Ohio.

Income tax in Ohio

Ohio has a state income tax, ranging from 2.850% to 4.797%. In addition, the state’s counties, cities and municipalities are also allowed to assess local income taxes. Overall, 649 municipalities and 199 school districts in Ohio have income taxes. Statewide, the local income tax collections as a percentage of adjusted gross income (AGI) was 1.56% in 2019.

In comparison to other states, Ohio rates as one of the worst for individual income taxes by the Tax Foundation — it’s ranked 43rd out of 50, with No. 50 being the worst.

Income tax bracket

Ohio has a progressive income tax system, meaning people who earn more have higher tax rates than lower-income residents.

There are five Ohio state income tax brackets:

Rate

Minimum income

Maximum income

2.850%$22,150.01$44,250
3.326%$44,250.01$88,450
3.802%$88,450.01$110,650
4.413%$110,650.01$221,300
4.797%$221,300.01N/A

Those brackets apply to the adjusted gross income, regardless of filing status.

Ohio’s state income taxes are also unusual in that personal and dependent exemptions are based on AGI. Taxpayers can reduce their taxable income by:

  • $2,400 for an AGI of $40,000 or less
  • $2,150 for an AGI greater than $40,000, but lesser than $80,000
  • $1,900 for an AGI greater than $80,000

Corporate income tax in Ohio

Ohio imposes a gross receipts tax on businesses — referred to as the commercial activity tax (CAT) — instead of a corporate income tax. This means the state assesses a tax on the company’s total receipts, without any deductions for the cost of goods sold or other expenses.

The Ohio state tax rate for the CAT is $150 on the first $1 million in taxable gross receipts and 0.26% on receipts over $1 million.

Businesses with taxable gross receipts of $150,000 or more per calendar year are required to register for the CAT, file all applicable returns and pay the tax.

Property tax in Ohio

In Ohio, property taxes are locally levied, varying by jurisdiction.

According to the Tax Foundation’s 2020 analysis of U.S. Census Bureau data, the average property tax rate (as a percentage of owner-occupied housing value) in Ohio is 1.62%, and the state ranks ninth in the U.S. for the highest residential property taxes.

Ohio allows a 10% reduction, or “rollback,” for properties not intended primarily for business use and a 2.50% rollback for homesteads, defined as dwellings plus up to one acre of land occupied by the homeowner. The local tax jurisdiction gets reimbursed by the state for the rollback costs.

Sales tax in Ohio

Most states in the U.S., including Ohio, charge a statewide sales tax on the sale of products to consumers. Sales taxes typically help pay for services like schools, roads and fire departments.

The Ohio tax rate for sales tax is 5.75%. Local jurisdictions are also allowed to tack on their own sales tax to the statewide rate, which is capped at 2.25%. The average local sales tax rate is 1.48%, making Ohio’s average combined state and local sales tax rate 7.23%. This establishes Ohio as the 20th most expensive state for sales tax, as noted by the Tax Foundation.

Businesses are required to charge a sales tax on all retail sales unless:

  • The purchaser has an exemption certificate, and the vendor keeps a copy of that exemption certificate on file.
  • The item sold is a prescription drug or food sold for off-premises consumption.
  • The purchaser is an entity known to always be exempt, including the federal government, the State of Ohio or any local government entity within Ohio

Ohio county-level sales taxes

You can refer to the table below to see the combined state and local sales tax rates in specific Ohio counties. The lowest combined rate is 6.50%; the highest rate is 8.00% in Cuyahoga County, home to Cleveland, the state’s second-largest city.

County
Combined state and local tax rate
Adams 7.25%
Allen 6.85%
Ashland 7.00%
Ashtabula 6.75%
Athens 7.25%
Auglaize 7.25%
Belmont 7.25%
Brown 7.25%
Butler 6.50%
Carroll 6.75%
Champaign 7.25%
Clark 7.25%
Clermont 6.75%
Clinton 7.25%
Columbiana 7.25%
Coshocton 7.25%
Crawford 7.25%
Cuyahoga 8.00%
Darke 7.25%
Defiance 6.75%
Delaware 7.00%
Erie 6.75%
Fairfield 6.75%
Fayette 7.25%
Franklin 7.50%
Fulton 7.25%
Gallia 7.25%
Geauga 6.75%
Greene 6.75%
Guernsey 7.25%
Hamilton 7.80%
Hancock 6.75%
Hardin 7.25%
Harrison 7.25%
Henry 7.25%
Highland 7.25%
Hocking 7.25%
Holmes 7.00%
Huron 7.25%
Jackson 7.25%
Jefferson 7.25%
Knox 7.25%
Lake 7.25%
Lawrence 7.25%
Licking 7.25%
Logan 7.25%
Lorain 6.50%
Lucas 7.25%
Madison 7.00%
Mahoning 7.25%
Marion 7.25%
Medina 6.75%
Meigs 7.25%
Mercer 7.25%
Miami 7.00%
Monroe 7.25%
Montgomery 7.50%
Morgan 7.25%
Morrow 7.25%
Muskingum 7.25%
Noble 7.25%
Ottawa 7.00%
Paulding 7.25%
Perry 7.25%
Pickaway 7.25%
Pike 7.25%
Portage 7.00%
Preble 7.25%
Putnam 7.00%
Richland 7.00%
Ross 7.25%
Sandusky 7.25%
Scioto 7.25%
Seneca 7.25%
Shelby 7.25%
Stark 6.50%
Summit 6.75%
Trumbull 6.75%
Tuscarawas 6.75%
Union 7.00%
Van Wert 7.25%
Vinton 7.25%
Warren 7.00%
Washington 7.25%
Wayne 6.50%
Williams 7.25%
Wood 6.75%
Wyandot 7.25%

Estate tax in Ohio

Ohio does not have a state-level estate tax.

Inheritance tax in Ohio

Ohio does not levy an inheritance tax.

Other taxes in Ohio

Alcohol and tobacco tax

The federal government and many states impose excise taxes on alcohol and tobacco in order to generate additional tax revenue and discourage consumption of these products. Ohio levies the following excise taxes in addition to general sales taxes:

  • $0.32 per gallon of wine
  • $0.18 per gallon of beer
  • $3.38 per gallon of liquor
  • $1.60 per pack of 20 cigarettes
  • 17% of the wholesale price for other tobacco products

Gas tax

All 50 states impose a gas tax to help cover the cost of road construction and maintenance. The Ohio tax rate for motor fuel tax is $0.385 per gallon of gasoline, $0.20 per gallon of compressed natural gas (CNG) and $0.47 per gallon of diesel and other fuel types.

Use tax

A use tax is a tax on the use or consumption of a taxable product or service on which no sales tax has been paid within the tax jurisdiction. For example, say an Ohio resident travels to Delaware (where there is no sales tax) to buy a car. When they register the car in Ohio, the state would assess the state sales and use tax rate of 5.75% and any applicable local sales taxes.

Intangible tax

An intangible tax is paid for the privilege of owning, transferring or otherwise benefitting from intangible assets, such as brands or stocks. Ohio taxes dealers in intangibles, including companies that lend money; buy, sell or exchange notes, mortgages and other debts; and buy or sell bonds, stocks and other investments. The state’s tax rate on intangibles is 0.80%.

Re-employment tax

Re-employment taxes, also known as unemployment taxes, are a type of payroll tax designed to finance the cost of state unemployment benefits. In Ohio, for 2021 new employers pay unemployment tax of 2.70% of the first $9,000 of wages for each employee each year. (For employers in the construction industry, the rate is 5.80% of the first $9,000 of wages.)

Once the employer has been paying unemployment taxes for four consecutive calendar quarters, they become eligible for an experience rate, which ranges from 0.30% to 9.30%.

FAQs about taxes in Ohio

Every Ohio resident is subject to Ohio income taxes (even those who only live there part time), and non-residents with Ohio-sourced income are also required to file an Ohio income tax return. However, if your Ohio taxable nonbusiness income (found on line 7 of your Ohio IT 1040 Form) is $22,150 or less, your tax rate is zero.

Ohio generally considers anyone with an “abode” in Ohio to be a resident, and that abode can be owned or rented. When people split their time between Ohio and another state, the Ohio Department of Taxation will consider where the person maintains a driver’s license, voter registration and more when determining whether the person is an Ohio resident.

Typically, the deadline to file an Ohio income tax return is April 15. For 2020 tax returns, the deadline was moved to May 17, 2021, following the IRS’s extended deadline due to the COVID-19 pandemic.

If you need more time to file, Ohio honors the IRS extension, giving you until Oct. 15 to file a return. However, any tax due must still be paid by the original filing deadline.

The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.

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