Ohio is not among the best or the worst when it comes to individual taxes according to The Tax Foundation. Here is some general information to help you achieve a basic understanding of the system as you consider relocation or settle into your new hometown. Please remember that nothing can replace the professional advice from your accountant or financial advisor.
Individual Income Taxes
Ohio has a graduated individual income tax, with rates ranging from 2.765 % to 3.990 %. It is the only state that allows individual municipalities to set their own tax rates, establish their own rules regarding income and deductions, and issue their own tax forms. It is important to know this when comparing dream homes in different locations.
If you are from one of the states without individual income taxes, this will be new for you. However, states without individual income taxes often make up the lost revenue with other taxes or reduced services. A state's total tax burden, which measures the percent of income paid in state and local taxes, could be a more accurate measure of its affordability than individual income tax rates alone. In 2022, Ohio ranked 24th in state and local tax burden rankings - right in the middle.
CCA and RITA - Ohio's "Hidden" Income Tax
In Ohio, when you work in one town and live in another (which is almost everyone!), you will have to pay taxes to and receive credit from both in most cases. Many people have hybrid schedules these days. Typically, taxes will be withheld day by day where the work is performed, but we encourage you to consult your preferred tax specialist.
The tax implications are usually not large enough to affect your short list as you consider where to live, but it is important to know about this unique tax situation. Municipalities rely on one of two different agencies to collect and remit income taxes on their behalves.
The Central Collection Agency (CCA) is a division of the City of Cleveland's department of finance and collects the municipal income tax for the City of Cleveland and other member municipalities.
The Regional Income Tax Authority (RITA) administers income taxes belonging to each of the Ohio cities and villages that have joined with RITA. The income tax is created by the laws of each municipality, and RITA administers these taxes on their behalf.
Each municipality has its own ratio for offering credit for all or a portion of the taxes you pay in your work municipality. Talk to your company's relocation specialist or your CPA for deeper insight and financial and tax advice.
Central Collection Agency
Regional Income Tax Authority
Top Marginal State Income Tax Rates (as of January 1, 2023)
The map below shows you how Ohio's highest individual income tax bracket compares to the highest tax bracket in your current home state. Click on the map for more details.
2023 Individual Tax Rates By State
Residential Property Taxes
Each Ohio suburb sets its own property tax rate. If a suburb is served by more than one school district, there is often more than one property tax rate in that community. These collected taxes typically support the county, port authority, municipality, public schools, public libraries, public park systems, and many times a technical school or community college.
Higher Property Taxes
While not the highest tax rate in Ohio, Cuyahoga County has six areas in the top ten of the highest property taxes per $100k home value in Ohio.
A portion of South Euclid in Cleveland Heights-University Heights school district at $3,871/$100k
Shaker Square area of Cleveland at $3,858/$100k
Shaker Heights at $3,772/$100k
University Heights at $3,740/$100k
Most of Cleveland Heights at $3,717/$100k
Garfield Heights at $3,525/100k
Average Property Taxes Per $100k in Home Value
It is worth noting that, like in many states, the counties with the highest property taxes are also home to the state's metropolitan areas. Other Ohio counties with higher property taxes are home to Cincinnati (Hamilton County), Dayton (Montgomery County), Columbus (Franklin County), and Toledo (Lucas County).
Lower Property Taxes
Suburbs with the lowest property taxes tend to have strong commercial or industrial pockets and thoughtfully implemented zoning laws. Beautiful residential neighborhoods, retail, and dining hubs feel separate from commercial and industrial spaces.
Additional Resources
The Tax Foundation has an interactive property tax map showing how property taxes compare across the country.
Cleveland.com offers a wonderful searchable database that lets you enter the name of a school district to see the property tax rate per $100k home value in the seven Greater Cleveland/Akron counties.
You will also find property tax information in the Suburbs and Neighborhoods section of Your Curated Info.
Sales Tax
Ohio has a combined sales tax rate. A portion is at the state level while Ohio counties also set their own local tax rates. The combined rates range from 6.5% to 8%. If you are from one of the five states that do not charge any sales tax, this will be very new for you.
Ohio does have a permanent Sales Tax Holiday every year on the first Friday, Saturday, and Sunday of August. The break applies mostly to back-to-school items such as clothes and supplies.
Per the Tax Foundation, Ohio recently ranked 20th in the US for our sales tax rates. Sales Tax Rates 2023
How High are Sales Taxes in Your State? (as of January 1, 2023)
The map below shows combined state and average local sales tax rates. Click on the map for more details.
Questions?
Taxes are complicated in every state. If you need to ask questions of a local tax expert, EA's corporate accountant has kindly offered to field calls from the candidates and new hires that we support in a non-solicitation environment. We can't vouch for how quickly he'll be able to return your call at the height of tax season!John A. Bonfiglio, CPA, CVA Partner at BSB Partners Photo Credits Preview modal-
Photo Credits
Free Stamp by John Kannenberg (CC BY-NC-ND 2.0)
Central Collection Agency Logo Courtesy of CCA
Regional Income Tax Authority Logo Courtesy of RITA
State Income Tax Rates Map Courtesy of The Tax Foundation
Sales Tax Rates Map Courtesy of The Tax Foundation
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