TAX NEWS - 2010

Ohio State Taxes

The State of Ohio, or the Buckeye's state as it is known, is in the process of cutting its tax rates. In 2005 the top rate of income tax was 7.185%. Now it is 6.87% with further cuts planned until 2009.

There are seven brackets of income tax. On the first $5000 of taxable income tax is paid at 0.681%. This increases to 1.361% on incomes between $5,001 and $10,000. It is 2.722% on taxable income between $10,001 and $15,000, rising to 3.403% on incomes between $15,001 and $20,000. On taxable incomes between $20,001 and $40,000 it is 4.083%. Between $40,001 and $80,000 it is 4.764%. It is 5.444% on incomes between $80,001 and $100,000 and 6.32% on incomes from $100,001 and $200,000. The top rate on incomes over $200,001 and above is 6.87%.

In addition to the state income tax there are local income taxes levied by some municipalities in Ohio.

Income taxes to fund the public education system are levied by some school districts. The school district income tax is collected through employers. The employer withholds an amount based on the individual quaterly estimated payments and annual returns. These funds are earmarked specifically for the support of school districts.

Residents of those school districts that collect an income tax must file an annual return on Ohio form SD100.

State sales tax is 5.5%. It has been cut from its previous 6% level. Local sales taxes may also be collected by counties and regional transport authorities. There is a maximum level of 1.5% on regional transport sales taxes. Local authorities can increase their sales taxes in increments of 0.25%. There is a total limit for the sales tax from state, county and transit authorities of 8.5%

Tangible personal property for residential, agricultural and business use is subject to taxation. Business property tax is in the process of being phased out and will be eliminated by 2009. Local tax programs are adminstered by the Property Tax Administration Fund. The 10% tax rollback on commercial and industrial properties was removed in 2005. There is still a rollback for residential and agricultural properties.

There is no inheritance or estate tax in Ohio. Federal tax law eliminated the tax credit for state death duties from January 1 2005. Estates of those who died on or after that date are not liable to tax.

Tax returns can be filed on line in Ohio. All state income tax returns and local taxes can be filed in this way. Tax payers in Ohio can check the status of all their tax returns, including school district income tax, on line.

Tax returns must be filed by April 15 every year. That is the same as in other states. If that date falls on a Sunday or a public holiday then they can be filed the next day.