The Breakdown of Local and State Ohio Taxes
Ohio has some of the most complicated local taxes in the country - including JEDD, JEDz, and more.
The Breakdown of Local and State Ohio Taxes: A Comprehensive Guide
Ohio’s tax system features a mix of state and local taxes that shape the overall tax burden for residents and businesses. For example, the state imposes a progressive income tax with relatively low top rates, offset by comparatively higher property and sales taxes.
In this breakdown of local and state Ohio taxes, we’ll discuss fundamental components of Ohio’s taxes for individuals and businesses.
Overview of Ohio State Taxes
To start, here’s a broad overview of some of the most important things to know about local and state Ohio taxes.
- Ohio uses a graduated state income tax with just two brackets (and a large zero-tax bracket for lower incomes).
- Ohio is one of three states (including Nevada and Washington) that does not have a corporate income tax but instead has a gross receipts tax.
- Its state-local tax system ranks nationally in the lower-middle tier for business tax competitiveness (35th out of 50 in the Tax Foundation’s 2025 State Tax Competitiveness Index).
- Ohio’s tax burden (the share of income residents pay in taxes) is slightly above the national average. In 2024, Ohio’s total state and local tax burden was estimated at 8.9% of income, the 16th-highest in the nation.
- Ohio's average effective property tax rate is 1.43%, which varies substantially depending on the city or county.
Income Tax in Ohio
As mentioned above, Ohio’s graduated state income tax only has two brackets.
Because the first $26,050 of income is exempt, many low-income households owe nothing in state tax.
These rates apply to all filing statuses because Ohio does not differentiate brackets by single or joint status.
The Ohio Department of Taxation lists the state’s tax rates for 2024 as:
- $0 – $26,050: 0.000% of Ohio taxable nonbusiness income
- $26,051 – $100,000: $360.69 + 2.75% of the excess over $26,050
- Over $100,000: $2,394.32 + 3.50% of the excess over $100,000
This top rate of 3.5% is relatively low—in fact, it puts Ohio in the bottom third of states for top income tax rate.
Ohio’s income tax is flat across all types of income (wages, interest, capital gains, etc.), with relatively few deductions. Notably, Social Security benefits are exempt from Ohio income tax (more on retirement income below).
If you’re an Ohio resident who works in another state (or vice versa), Ohio offers a resident tax credit to avoid double taxation of the same income.
There’s also a Joint Filer Credit (up to $650) for married couples where each spouse has at least $500 of qualifying income.
There are also several other targeted credits, including credits for job training, certain scholarship donations, and adoption expenses.
Property Taxes in Ohio
Property taxes in Ohio are levied at the local level (county, city, township, and school district)—there is no state-level property tax.
Again, Ohio’s property tax rates vary by county and locality, but Ohioans pay about 1.3% of a home’s value in property taxes each year.
For example, counties like Cuyahoga (Cleveland) and Franklin (Columbus) tend to have higher rates, while some rural counties have lower rates.
Property tax rates are usually expressed in “mills,” with one mill equal to $1 of tax per $1,000 of assessed value. Ohio assesses residential property at 35% of market value for tax purposes (assessment ratio), then applies the local millage rate.
Ohio offers a Homestead Exemption to help certain homeowners—notably seniors (65+) and disabled residents—reduce their property taxes. This program exempts up to $25,000 of the market value of a home from taxation for eligible homeowners.
Sales Tax in Ohio
Ohio imposes a state sales tax of 5.75% on most retail sales of goods and certain services.
On top of that, counties and regional transit authorities can levy local sales taxes, which vary by location. Combined, the average sales tax rate (state + local) in Ohio is about 7.24%.
Local rates range from 0.5% up to about 2.25%, so the total sales tax you pay will depend on where you make your purchase.
For example, in most of Cuyahoga County (Cleveland area), the total sales tax rate is 8.0%, which is the highest in the state.
Ohio’s sales tax applies to tangible goods (unless exempt) and a short list of services. Notably, groceries are exempt from sales tax (except for prepared foods and soft drinks). Prescription drugs and most medical devices are also exempt.
See the full list here.
We discuss the importance of location accuracy in payroll in this article.
Corporate Taxes in Ohio
Ohio is one of the few states that no longer has a traditional corporate income tax on C-corporation profits.
Instead, Ohio levies a Commercial Activity Tax (CAT), which is essentially a gross receipts tax.
The CAT applies to most businesses (companies, partnerships, LLCs, etc.) with taxable gross receipts from Ohio sales. The tax rate is 0.26% or 2.6 mills, which is charged on gross revenues, not profits.
This rate may seem low at first glance, but since it’s on total receipts without deductions, it can add up, and it applies regardless of whether a business is profitable.
Starting in 2024, Ohio significantly raised the CAT exemption threshold. In 2024, no CAT was due on the first $3 million of gross receipts in 2024, and this exemption rose to $6 million in 2025.
Companies above the threshold will pay 0.26% of their Ohio receipts over the exempt amount. The annual minimum tax was also eliminated in 2024.
Local Taxes in Ohio
Local taxes are a substantial part of Ohio’s tax structure, particularly through municipal and school district income taxes.
Most Ohio cities levy an income tax on wages, salaries, and business income. Without voter approval, the maximum rate is 1%.
More than 200 school districts also impose their own income taxes, typically ranging from 0.5% to 2%, which local voters approve to fund education.
Filing for local income taxes can be complex, as individuals may need to file separate returns for each city where they earned taxable income unless covered under Ohio’s Business Gateway or RITA system.
Besides income taxes, some cities impose additional local taxes, such as hotel bed taxes, admissions taxes on event tickets, and utility taxes.
For example, Cleveland has an 8% municipal admissions tax, while other cities levy additional sales taxes on specific transactions.
These local taxes, combined with state taxes, contribute significantly to Ohio’s overall tax burden.
Filing and Payment Deadlines in Ohio
Ohio’s state individual income tax returns (Form IT 1040) are due on the same schedule as federal returns.
For calendar year filers, the deadline is April 15. If April 15 falls on a weekend or holiday, the due date moves to the next business day (just as the IRS date does).
Ohio offers multiple ways to pay your taxes, including online, via check, or payment voucher.
Ohio encourages electronic filing and payment—many taxpayers file their state returns electronically either through the IRS e-file system (if using software) or the state’s I-File system.
Summary: Ohio Taxes
Ultimately, Ohio’s tax burden is a mixed bag: the state doesn’t over-rely on any single tax, which creates balance, but it also means there’s no obvious low-tax escape (except perhaps avoiding certain local taxes).
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Local and State Ohio Taxes: Frequently Asked Questions
Here are a few more questions and answers about Ohio taxes:
What is the sales tax rate in Ohio?
The base state sales tax rate is 5.75%. On top of that, counties and transit authorities can add their own sales tax. The average combined rate statewide (state + local) is about 7.24%.
Which Ohio cities have the highest taxes?
It depends on which tax.
In terms of sales tax, Cleveland (Cuyahoga County) has the highest rate at 8%. Columbus (Franklin County) is moving to 8% as well, and Cincinnati (Hamilton County) is about 7.8%.
For local income taxes, a number of cities have rates of 2.5% (Cleveland, Columbus, Toledo, etc.), and a few small cities go up to 3% (the maximum allowed without special approval).
If we talk about the overall tax burden (combining all taxes), generally, urban residents in Ohio (who pay city income taxes and higher property taxes) bear a heavier total tax load than those in rural or exurban areas.
Are Social Security benefits taxed in Ohio?
No—Ohio does not tax Social Security benefits. Social Security income is completely exempt from Ohio state income tax.
This is a relief for retirees, as it means your Social Security checks won’t be reduced by state tax (though they may still be subject to federal income tax, depending on your total income).
Does Ohio have an inheritance or estate tax?
No. Ohio has no estate or inheritance tax as of March 2025. If you’re the beneficiary of an estate or inheritance from an Ohio resident, you owe no Ohio tax on that inheritance.
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