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 property tax bills soar in the Buckeye State, Ohio homeowners may soon get relief.
Starting in 2026, two methods of raising property taxes will be eliminated. Not only that, but a working group assembled by Gov. Mike DeWine has put forth 20 proposals that may provide residents with property tax cuts. The proposals are awaiting action from the General Assembly, while the state House has a $1.7 billion property tax relief bill in the works.
For more information, check out Kiplinger's report, Ohio Property Tax Shock: Why Your New Assessment Is So High (And What Comes Next).
[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
-
A Lesson From the School of Rock About the MarketsIt's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I retired at 65 with $7.8 million and feel like I over-saved. My 40-something son is on the same path. Should I tell him to reconsider?We ask financial experts for advice.
-
Three Critical Tax Changes Could Boost Your Paycheck in 2026Tax Tips The IRS predicts these tax breaks may change take-home pay in 2026. Will you get over $1,000 in tax savings?
-
Trump’s 2025 Tax Bill: What’s Changing and How It Affects Your TaxesTax Law From standard deduction amounts to tax brackets and Medicaid cuts, here’s what individual filers need to know about tax changes in Trump's so called "big beautiful bill."
-
The Rubber Duck Rule of Retirement Tax PlanningRetirement Taxes How can you identify gaps and hidden assumptions in your tax plan for retirement? The solution may be stranger than you think.
-
RMDs, Roth, and SS: Test Your Knowledge of Retirement Tax RulesQuiz Don't let the IRS catch you off guard. Take our quiz to reveal common retirement tax rules that could save (or cost) you thousands.
-
IRS Updates 2026 Tax Deduction for People Age 65 and OlderTax Changes Adjustments to the extra standard deduction can impact the tax bills of millions of older adults. Here are some new amounts to know for 2026.
-
IRS Reveals New 2026 Child Tax Credit and other Family Credit AmountsTax Credits Key family tax breaks are higher for 2026, including the Earned Income Tax Credit and the Adoption Credit. Here's what they're worth.
-
Standard Deduction 2026 Amounts Are HereTax Breaks What is the standard deduction for your filing status in 2026?
-
New 2026 Income Tax Brackets Are Set: Will Your Rate Change?Income Tax The IRS has adjusted federal income tax bracket ranges for the 2026 tax year to account for inflation. Here's what you need to know.
