Research Areas
Ohio
The Facts on Ohio's Tax Climate
Here are some basic facts on Ohio's tax system and how it compares to other states:
Tax Freedom Day Arrives on April 6 in Ohio
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2011, Ohio taxpayers work until April 6 (ranked 28th highest nationally) to pay their total tax bill, 6 days before national Tax Freedom Day (April 12). The Tax Freedom Days of neighboring states are: Indiana, April 5 (ranked 32nd); Pennsylvania, April 14 (ranked 13th); West Virginia, March 31 (ranked 44th); Kentucky, April 2 (ranked 42nd); and Michigan, April 7 (ranked 26th).
Full study of Tax Freedom Day, nationwide and in each state
Ohio's State and Local Tax Burden Below National Average
Ohio's state and local tax burden is currently estimated at 9.7% of income (18th nationally), just below the national average of 9.8%. Compared to the 1977 data, Ohio had a tax burden of 8.9% (40th nationally), increasing 0.8% overall. Currently Ohio's taxpayers pay $3,652 per capita in state and local taxes.
Ohio's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Map of U.S. Showing all State's Burdens and Ranks
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2009
Ohio's 2012 Business Tax Climate Ranks 39th
Ohio ranks 39th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states rank as follows: Indiana (11th), Pennsylvania (19th), West Virginia (23rd), Kentucky (22nd) and Michigan (18th).
50-State Comparison of Business Tax Climates (data only)
2012 State Business Tax Climate Index, Ninth Edition (full study)
Ohio's Individual Income Tax System
Ohio's personal income tax system is one of the nation's most complex and is composed of nine separate tax brackets. Ohio's top rate of 5.925% kicks in at an income level of $200,000. Among states that levy personal income taxes, Ohio's top tax rate is 28th highest nationally. Ohio's 2008 state-level individual income tax collections were $854 per person, which ranked 26th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita
Ohio's Corporate Income Tax System
A gross receipts-style tax, the Commercial Activity Tax (CAT) was implemented in 2005. It was phased in through 2010, while the Corporate Franchise Tax (Ohio's corporate income tax) was phased out. Starting April 1, 2009 the CAT rate is .26%. For tax year 2009 companies owe 20% of Corporate Franchise Tax liability. In 2008, state-level corporate tax collections (excluding local taxes) were $65, which ranked 45th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2009
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006
Ohio's Sales and Excise Taxes
Ohio's state sales tax rate stands at 5.5%, which is below the national median of 5.85%. In 2007 combined state and local general and selective sales tax collections were $1,635 per person, which ranked 12th highest nationally. Ohio's gasoline tax stands at 28 cents per gallon, ranking 17th highest nationally. Ohio's cigarette tax stands at $1.25 per pack and ranks 24th highest nationally. The sales tax was adopted in 1934, gasoline tax in 1925, and the cigarette tax in 1931.
50-state table of sales, cigarette, gas, beer, wine, and spirits tax rates.
50-State Table of State and Local General and Selective Sales Tax Collections Per Capita
Ohio Property Taxes: Middle of the Pack
Ohio is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. Ohio's localities collected $1,095.99 per capita in property taxes in fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. The state government collected $3.02 per capita in property taxes in FY2006, bringing the total property taxes collected in Ohio to $1,099.01 per capita, ranking 24th highest nationally.
State property tax collections per capita by state
Federal Tax Burdens and Expenditures: Ohio is a Beneficiary State
Ohio taxpayers benefit about equally compared to the average state from federal spending. Per dollar of Federal tax collected in 2005, Ohio citizens received approximately $1.05 in the way of federal spending. This ranks Ohio 31st highest nationally. This represents a slight rise from 1995 when Ohio received $0.97 per dollar of taxes in federal spending, ranking it 32nd nationally. Neighboring states and the amount of federal money received per dollar of federal taxes collected were: Indiana ($1.05), Pennsylvania ($1.07), West Virginia ($1.76), Kentucky ($1.51) and Michigan ($0.92).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state
