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
-
Dow Falls 557 Points to Start NVDA Week: Stock Market TodayThe Oracle of Omaha saw growth and value in certain corners of the stock market during the third quarter.
-
Nvidia Earnings: Live Updates and Commentary November 2025Nvidia's earnings event is just days away and Wall Street is zeroed in on the AI bellwether's third-quarter results.
-
3 Ways High-Income Earners Can Maximize Their Charitable Donations in 2025Tax Deductions New charitable giving tax rules will soon lower your deduction for donations to charity — here’s what you should do now.
-
Another State Bans Capital Gains Taxes: Will More Follow in 2026?Capital Gains A constitutional amendment blocking future taxes on realized and unrealized capital could raise interesting questions for other states.
-
An HSA Sounds Great for Taxes: Here’s Why It Might Not Be Right for YouHealth Savings Even with the promise of ‘triple tax benefits,’ a health savings account might not be the best health plan option for everyone.
-
Emergency Tax Bill Ends $6,000 Senior Deduction and Tip, Overtime Tax Breaks in D.C.Tax Law Here’s how state tax conformity rules could immediately raise your income tax liability.
-
New RMD Rules: Can You Pass This Retirement Distributions Tax Quiz?Quiz Take our RMD quiz to test your retirement tax knowledge. Learn about RMD rules, IRS deadlines, and tax penalties that could shrink your savings.
-
10 Retirement Tax Plan Moves to Make Before December 31Retirement Taxes Proactively reviewing your health coverage, RMDs and IRAs can lower retirement taxes in 2025 and 2026. Here’s how.
-
IRS Updates Capital Gains Tax Thresholds for 2026: Here’s What’s NewCapital Gains The IRS has increased the capital gains tax income thresholds for 2026. You'll need this information to help minimize your tax burden.
-
When to Hire a Tax Pro: The Age Most Americans Switch to a CPATax Tips Taxpayers may outsource their financial stress by a specific age. Find out when you should hire a tax preparer.
