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Official Tax Guide

Ohio Taxes 2025: Income, Sales, and Property Tax Guide

Complete guide to Ohio state taxes. Income tax (2.75% - 3.5%), sales tax, and what you need to know before moving.

Updated January 15, 2026
5 min read

Ohio State Tax Guide 2025

Income Tax

Ohio’s state income tax system is currently a graduated (progressive) tax, but it is moving toward a flat tax structure. For the 2025 tax year, the system is in transition, offering a simplified flat rate for most taxpayers while maintaining a few brackets for higher incomes.

  • Rate Structure: The primary tax rate for the 2025 tax year is a flat 2.75% for most taxable income brackets. However, Ohio retains a marginal structure for higher earners, where the rate can reach up to 3.5% on income exceeding specific thresholds.
  • Taxable Income: This is calculated based on your federal Adjusted Gross Income (AGI), with specific Ohio adjustments, deductions, and exemptions applied.
  • Filing Status: Tax brackets vary slightly depending on filing status (Single, Married Filing Jointly, etc.).

Sales Tax

Ohio’s sales tax is a combination of state and local rates, which can vary significantly depending on the county and municipality.

  • State Rate: The base state sales tax rate is 5.75%.
  • Local Taxes: Counties and transit authorities may levy additional sales taxes. When combined, the total sales tax rate in many areas ranges from 6.5% to 8%.
    • Example: A purchase in a major metropolitan area like Cleveland or Columbus may incur a higher total rate than a purchase in a rural county.
  • Nexus: If you are moving to Ohio to start a business, be aware that economic nexus rules may require you to collect and remit sales tax if you exceed certain sales thresholds in the state.

Property Tax

Property taxes in Ohio are administered at the local level and are a primary source of funding for schools, libraries, and emergency services.

  • Assessment: Real estate is valued by county auditors. Taxes are levied on the assessed value of the property (35% of the appraised market value).
  • Rates: While rates vary by county, Ohio’s effective property tax rate typically falls within the range of 1.5% to 2.2% of the home’s value. This is slightly above the national average.
  • Homestead Exemption: Ohio offers a Homestead Exemption for homeowners who are 65 years or older or who are permanently disabled. This exempts a portion of the home's value from property taxation, potentially lowering the annual tax bill.

Other Notable Taxes

When budgeting for your move, consider these additional tax categories:

  • Gas Tax: Ohio imposes a state excise tax on gasoline and diesel fuel. As of 2025, the rates are adjusted annually for inflation but generally hover around 38.5 cents per gallon for gasoline (combined state and federal rates apply at the pump).
  • "Sin Taxes": Ohio levies excise taxes on specific goods:
    • Cigarettes: Approximately $1.85 per pack.
    • Alcohol: Rates vary by type (beer, wine, spirits) and are a combination of state excise tax and local option taxes.
  • Inheritance Tax: Ohio does not have an inheritance tax. This was fully phased out as of January 1, 2013. However, federal estate tax laws still apply to large estates.
  • Local Income Taxes: Some Ohio municipalities levy a local income tax (RITA). If you live or work in one of these areas, you may need to file a local return in addition to your state return.

Retiree Taxes

Ohio is generally considered tax-friendly for retirees.

  • Retirement Income: Ohio does not tax income from Social Security benefits, pensions, or 401(k)/IRA distributions for retirees who meet specific age or disability requirements.
  • Seniors: If you are 65 or older, you may qualify for a deduction on income not included in Social Security or pensions, further reducing your state tax liability.

Comparison to Neighbors

Ohio’s tax structure offers a mix of low and moderate rates compared to its bordering states:

  • Vs. Michigan: Michigan has a flat income tax rate (currently 4.25%), which is higher than Ohio’s current rates. However, Michigan does not tax retirement income, similar to Ohio.
  • Vs. Pennsylvania: Pennsylvania has a flat income tax rate (3.07%), which is comparable to Ohio’s. However, PA does not tax retirement income, whereas Ohio offers exemptions but retains a broader tax base.
  • Vs. Indiana: Indiana has a flat income tax rate (currently 3.05%), which is slightly higher than Ohio’s base rate. Indiana generally has lower property tax rates than Ohio.
  • Vs. Kentucky: Kentucky has a flat income tax rate (4.5% as of 2025), which is higher than Ohio’s. Kentucky also taxes some retirement income that Ohio exempts.

Disclaimer: Tax laws change frequently and can vary by jurisdiction. The information provided in this guide is for general educational purposes only and is based on data available for the 2025 tax year. It is not a substitute for professional advice. Please consult a Certified Public Accountant (CPA) or tax attorney regarding your specific financial situation.