What Percentage of Taxes Are Taken Out in Ohio?

Ohio’s tax system involves state and local taxes, impacting residents and businesses throughout the state. The percentage of taxes depends on an individual’s income, where they live, and their spending habits. Understanding these components provides clarity on Ohio’s tax landscape, including income, sales, property, and municipal income taxes.

Ohio State Income Tax

Ohio employs a progressive state income tax system, meaning higher income levels are taxed at a greater percentage. For the 2024 tax year, filed in 2025, the state income tax features three brackets. Income up to $26,050 is not subject to state income tax.

Income between $26,051 and $100,000 is taxed at 2.75% plus a base of $360.69. Income over $100,000 is taxed at 3.5% with a base of $2,394.32. These rates apply uniformly across all filing statuses.

Ohio residents and non-residents earning income sourced within the state are subject to this tax. Several state-level deductions and credits can reduce a taxpayer’s liability. For instance, taxpayers aged 65 or older may claim a $50 credit, and those receiving qualifying retirement income may be eligible for a credit up to $200.

Contributions to Ohio 529 college savings plans are deductible up to $4,000 per beneficiary annually. A new deduction is also available for contributions to Ohio Homebuyer Plus savings accounts. Social Security benefits are exempt from state income tax.

Ohio Sales Tax

Ohio imposes a statewide sales tax rate of 5.75% on the retail sale of tangible personal property and certain services. Local jurisdictions, including counties and regional transit authorities, often levy their own sales taxes. Combined sales tax rates vary across locations within Ohio.

Combined sales tax rates in Ohio can range from the base 5.75% up to 8%, depending on the specific county and any applicable transit authority taxes. The average combined state and local sales tax rate across Ohio is approximately 7.24%. Several common exemptions exist.

Most food items purchased for home consumption are exempt from sales tax. Prescription drugs and certain medical equipment also qualify for sales tax exemption. Clothing items priced under $75 are generally exempt, though accessories like jewelry and certain prepared foods are typically taxable.

Ohio Property Tax

Property taxes in Ohio are assessed and collected at the local level by counties, townships, municipalities, and school districts. The amount of property tax is based on its assessed value, which for real property is statutorily set at 35% of its true market value.

Property tax rates are expressed in “mills,” where one mill represents $1 of tax for every $1,000 of assessed value ($0.001). Millage rates vary significantly depending on the taxing jurisdictions where a property is located. The total tax rate for a parcel includes all levies enacted by local authorities or approved by voters.

The average effective property tax rate across Ohio ranges from approximately 1.43% to 1.57% of a home’s market value, though this can differ by county. All real property, including land and improvements, is subject to this tax unless exempt. Ohio law also provides for tax reductions, such as a 10% rollback on all real property tax bills and an additional 2.5% rollback for owner-occupied dwellings.

Ohio Municipal Income Tax

Many Ohio cities and villages levy municipal income taxes, which operate independently of the state income tax. These local income tax rates vary by municipality, ranging from 0% to over 3%. State law limits these rates to a maximum of 1% without voter approval.

Individuals are subject to municipal income tax if they reside or work within a municipality that imposes the tax. Businesses earning net profits from activities within a municipality are also subject to this tax. Employers withhold municipal income tax from employee wages based on the work location.

A common scenario involves individuals living in one municipality and working in another, both of which levy income taxes. The municipality of residence may offer a credit for taxes paid to the municipality where the income was earned. This credit helps to mitigate double taxation. Due to rate and rule variations, individuals and businesses must determine their municipal income tax obligations based on residence and work locations.