Navigating the complexities of state taxes can be daunting, but understanding Ohio's tax landscape is essential for residents and newcomers alike.
In this guide, we'll explore key components of The Buckeye State's tax system, from income and sales taxes to property taxes and retirement benefits.
Ohio state tax: Overview
Some workers in Ohio may see a bit more money in their paychecks this year, thanks to recent changes that lowered income taxes across the board.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But it's not all low taxes in the Buckeye State. Property taxes tend to be higher than in many other states, and Ohio drivers face one of the highest gas taxes in the country. So while there’s some relief on the income tax front, other costs can still add up.
In the news: As retail giants across the U.S. warn of looming price hikes, families looking forward to the upcoming school year are bracing for impact.
Prices for back-to-school and college supplies have been on the rise, and made worse by the Trump administration’s sweeping tariffs on imported goods. To soften the blow of rising costs, Ohio Gov. Mike DeWine announced that the state sales-tax holiday will once again run for two full weeks.
For more information, see Ohio Announces Two-Week Sales Tax Holiday Amid Tariffs, High Prices.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Ohio income tax
Ohio has a graduated state individual state income tax rate ranging from 2.75% to 3.5%, according to the Tax Foundation.
Note: Cities and school districts in Ohio can also impose local income taxes.
Ohio retirement taxes
Ohio taxes most types of retirement income, but military retirement pay is tax-exempt, and the state’s tax brackets are low when compared with other states. There is no estate or inheritance tax in Ohio.
Tax on Taxable Income: Low of 2.75% (on between $26,051 - $100,000) and a high of 3.5% (on more than $100,000)
(Note: Ohio tax brackets depend on residency and filing status.)
- Social Security: Not taxable
- Pensions: Taxable
- 401(k) and IRA Distributions: Taxable
Ohio sales tax
The state sales tax rate in Ohio is 5.75%.
Localities can add as much as 2.5%, and the average combined rate is 7.23%, according to the Tax Foundation.
- Groceries: Exempt
- Prescription drugs: Exempt
- Diapers: Exempt
- Menstrual products: Exempt
- Clothing: Taxable
How much are property taxes in Ohio?
In Ohio, the average effective property tax rate is 1.31%, which is higher than in most states.
Ohio Property Tax Breaks for Retirees
A homestead exemption is available for qualified homeowners, which allows up to $28,000 exemption of a home's market value from all local property taxes. Ohioans must have a household income that does not exceed $40,000 for 2025.
Homeowners must also meet one of the following criteria to qualify.
- Be 65 or older
- Have a permanent and total disability
- Be at least 59 years old and the surviving spouse of a deceased taxpayer who had previously received the exemption
Note: Taxpayers who were granted the exemption prior to 2014 will continue to receive it.
Ohio gas tax
Gasoline | $0.28 per gallon |
Diesel | $0.28 per gallon |
Source: Sales Tax Handbook
Ohio taxes on alcohol and tobacco
Product | Tax Amount |
|---|---|
Cigarettes | $1.60 per pack |
Other tobacco products | 17% of wholesale price |
Medical Marijuana | 5.75% |
Source: Sales Tax Handbook
Product | Tax Amount |
|---|---|
Beer | $0.18 per gallon |
Wine | $0.32 per gallon |
Liquor | State-Controlled |
Source: Sales Tax Handbook
Ohio estate and inheritance tax
Ohio doesn't have an estate or an inheritance tax.
Related
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.
-
Want To Retire at 55? See If You Can Answer These Five QuestionsWho said you can’t retire at 55? If you say yes to these questions, you may be on your way to an early retirement.
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)
State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.
-
The Final Countdown for Retirees with Investment IncomeRetirement Tax Don’t assume Social Security withholding is enough. Some retirement income may require a quarterly estimated tax payment by the September 15 deadline.
-
Standard Deduction 2025 Quiz: How Much Do You Really Know?Quiz Test your knowledge of IRS rules that impact how much money you keep in your wallet.
-
I'm 65 and My Property Taxes and Insurance Keep Going Up. How Can I Afford My House in Five Years?The costs of homeownership may continue to rise in retirement. Here's how to manage that.
-
IRS in Turmoil: GOP Budget Cuts and Staff Shake-Ups Threaten Taxpayer ServicesIRS Republican lawmakers advance a controversial budget bill that would gut IRS funding further, risking your 2026 tax filing season.
-
New ‘Taylor Swift Tax’ on Vacation and Second Homes: Is Your Home Next?Property Taxes An upcoming tax on luxury vacation homes is garnering attention on social media. Could a similar property tax land in your state soon?
-
Cruise Lines Sue to Block Hawaii’s New Climate Tourism TaxState Tax Your vacation to the Aloha State could come at a higher price tag next year. Here’s why.
-
21 Last-Minute Gifts for Grandparents Day 2025 to Give Right NowHoliday Tips Last-minute gifting is never easy. But here are some ideas to celebrate Grandparents Day.
