Taxation
Data and information on tax, fee, and insurance specifics.
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.
Property Tax
- Ohio property rates are 2007 rates, payable in 2008.
Ohio's real property assessment ratio is 35%. - Tax on real property is reduced by a factor, which varies from district to district and varies between residential and agricultural property and commercial and industrial property. The reduction factors do not apply to the tax on other types of property.
- The effective rate for residential and agricultural property is 57.566487.
- The effective rate for commercial and industrial property is 68.688188.
For additional information contact the Ohio Department of Taxation's Income Tax Division.
Corporate Franchise/State Income Tax
On June 30, 2005, Ohio Governor Taft signed Amended Substitute House Bill 66 (“House Bill 66”), Ohio's biennial budget bill. House Bill 66 dramatically restructures Ohio's tax system for most business taxpayers. The centerpiece of the legislation is the phase out over 4 years of the Tangible Personal Property tax and, for most corporations, the phase out over 5 years of the Franchise tax. These taxes will be replaced with a Commercial Activity Tax (CAT) that will be phased-in over a 5 year period.
Unemployment Insurance
0.4% to 9% (experienced rate) of the first $ 9,000 of wages paid to each employee. The new business rate for all employers, except those engaged in the construction industry is 2.7%. For employers engaged in construction, the new business rate is the average rate for the industry, or 5.0% for the calendar year 2007. 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.
Individual State Income Tax
Ohio personal income tax rates will decrease 4.2% per year or 21% over 5 years beginning with taxable years 2005 through 2009. The top marginal rates will decrease from the 2004 rate of 7.5%, to 5.925% for taxable year 2009.
Ohio levies an income tax on modified federal adjusted gross income (AGI). The same rate applies to both separate and joint returns; however, a joint filing credit is allowed on a joint return if each spouse has earned income of $500 or more. The joint filing credit ranges from 20% of the tax (if Ohio taxable income is $25,000 or less) to 5% of the tax (if Ohio taxable income is more than $75,000), not to exceed $650. Personal and dependency exemptions are $1,450 with an additional credit of $20 per exemption. There are no itemized deductions and there is no deduction for federal income tax.
The Ohio rate schedule is as follows:
| $0--5,000 | 0.649% of Ohio taxable income |
| $5,000--10,000 | $32.45 plus 1.299% of excess over $5,000 |
| $10,000--15,000 | $97.40 plus 2.598% of excess over $10,000 |
| $15,000--20,000 | $227.30 plus 3.247% of excess over $15,000 |
| $20,000--40,000 | $389.65 plus 3.895% of excess over $20,000 |
| $40,000--80,000 | $1,168.65 plus 4.546% of excess over $40,000 |
| $80,000--100,000 | $2,987.05 plus 5.194% of excess over $80,000 |
| $100,000--200,000 | $4,025.85 plus 6.031% of excess over $100,000 |
| Over $200,000 | $10,056.85 plus 6.555% of excess over $200,000 |