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Taxation

The result of a significant tax reform, Ohio has substantially lowered the cost of doing business in the state - with the lowest taxes in the Midwest by 2010.

Ohio's comparable rankings to state competitors will dramatically improve with the 2010 conclusion of the state's five-year tax reform plan. Ohio will become even more competitive, not only when compared with primary coastal markets, but also among the cohort of states with which Ohio routinely vies for business.

Ohio's favorable business climate and high quality of living, combined with low business and personal costs, make the state an increasingly viable location for business growth.

For more information please contact http://www.ohiomeansbusiness.com/ or (877) 466-4551

Effective Tax Rates on New Capital Investment

Personal Income Tax (for 2008, 2009 and 2010)

Reforms enacted in 2005 called for a gradual 21 percent across the board reduction in income tax rates. Tax rates have been reduced four times, and are now 16.8 percent lower than they were five years ago. A fifth rate cut is scheduled for 2011.

The Ohio rate schedule is as follows:

$0 - $5,000 0.618% of Ohio taxable income
$5,001 - $10,000 $30.90 + 1.236% of excess of $5,000
$10,001 - $15,000 $92.70 + 2.473% of excess over $10,000
$15,001 - $20,000 $216.35 + 3.091% of excess over $15,000
$20,001 - $40,000 $370.90 + 3.708% of excess over $20,000
$40,001 - $80,000 $1,112.50 + 4.327% of excess over $40,000
$80,001 - $100,000 $2,843.30 + 4.945% of excess over $80,000
$100,001 - $200,000 $3,832.30 + 5.741% of excess over $100,000
$200,001 - over $9,573.30 + 6.24% of excess over $200,000

Commercial Activities Tax (CAT)

A tax imposed on the privilege of doing business in Ohio. The CAT is measured by Ohio gross receipts and paid by business located both in and outside of Ohio, that operate in Ohio.

The CAT is paid by any business with Ohio gross receipts of $150,000 or more in a calendar year. Businesses with annual Ohio gross receipts of $150,000 or less are not subject to the CAT. Annual Ohio gross receipts from $150,001-$1 million are subject to a minimum $150 tax.

For Ohio gross receipts exceeding $1 million the rate is .26%. Out-of-state gross receipts are exempt.

Replacement for the Ohio Corporate Franchise and tangible personal property taxes.

Sales Tax

The sales tax in Hamilton County is 6.5%.

Local Earnings Tax

  • The local earnings tax in the city of Cincinnati is 2.1% on individual income and net profits.
  • The City does not tax stock options.

Real Property Tax

Real property, or real estate, which includes land and improvements to land (buildings, etc.) is subject to property tax in Ohio. The taxable value of real estate is 35 percent of market value. The effective tax rate applied to the assessed value varies by school district.

The average effective tax rate for real property in 2006 in Ohio was 63 mills.

Real Property Tax Formula:
(Actual value) x (.35) = Assessed value

(Assessed value) x (local millage) = Real property tax

For additional information contact the Ohio Department of Taxation's Income Tax Division.

Worker's Compensation

Ohio worker's compensation rates are calculated by the Ohio Bureau of Worker's Compensation (BWC).

The Ohio BWC classifies industries according to the National Council of Compensation Insurance. Each separate industry classification has its own basic premium rate.

The cost of claims in each industry classification determines rates. Base rates are calculated by estimating the cost of claims expected to occur in the next year using costs of past accidents and diseases in each industrial classification.

An employer's accident experience, fluctuations in payroll, medical costs, and worker's compensation benefit levels are primary factors in premium rates.

For more information or a quote, contact the Ohio Bureau of Worker's Compensation Customer Service Center at (800) OHIO-BWC

Unemployment Insurance

Employers must make contributions on the first $9,000 of each covered employee's wages. The contribution rate is 2.7%. For further information contact Ohio Department of Job & Family Services (614) 466-6282.

Incorporation Fees
Rate Per Share
First 1,000$0.10
1,001-10,000$0.05
10,001-50,000$0.02
50,001-100,000$0.01
100,001-500,000$0.0050
More than 500,000$0.0025

Initial Articles of Incorporation minimum fee of $125 plus these fees if more than 1,500 shares are issued.

 

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