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Tax Structure

Overview

Top Three Tax Climate in U.S.

Columbus Region companies benefit from the state of Ohio’s tax climate, ranked by KPMG and EY as one of the top three most business-friendly in the U.S.

Ohio has no corporate income tax, no personal property tax and no inventory tax.

The City of Columbus has the highest possible bond rating from all three major credit agencies. Columbus is the largest city in the U.S. to hold this distinction.

The State of Ohio has consistently received strong ratings from all three major credit agencies, including ratings upgrades in 2011 and 2012.

State and Local Tax Structure

CORPORATE INCOME/FRANCHISE TAXStateNone
LocalIncome tax rates apply to net profits. Approximate average rate of 2.0% across Columbus Region. Apportionment: property, payroll, sales.
COMMERCIAL ACTIVITY TAX (applies only to income where point of sale is Ohio)StateFlat fee of $150 on the first $1 million in taxable Ohio gross receipts for business exceeding $150,000.
•Tax rate of 0.26% on income >$1 million:
-Plus $800 if taxable Ohio gross receipts between $1 million and $2 million
-Plus $2,100 if taxable Ohio gross receipts between $2 million and $4 million
-Plus $2,600 if taxable Ohio gross receipts over $4 million
LocalNone
INVENTORY TAXStateNone
REAL PROPERTY TAX (Commercial/Industrial)LocalCollected at local level. Median effective rate among Columbus Region tax districts is 1.99% (average effective rate 2.23%)
SALES TAXState5.75%
LocalCounty average: 1.36%
PERSONAL INCOME TAXStateBrackets from 0.495% on first $5,250 to 4.997% on income above $210,600. $1,750-$2,250 personal exemption and, if income under $30,000, $20 credit. Effective rate on $35K (1 exemption, no joint filing): 1.89% Effective rate on $75K (1 exemption, no joint filing): 2.68%
LocalRate depends on municipality of employment and residence. Approximate average rate of 2.0% across Columbus Region.

Top 10 States for Total Effective Rate by Facility Type

New Existing Overall
1. Nebraska 1. Wyoming 1. Georgia, Nebraska (tie)
2. New Jersey, Oklahoma (tie) 2. Georgia, South Dakota (tie) 3. Wyoming
4. Ohio 4. Arizona 4. Ohio
5. Georgia 5. Nebraska 5. Oklahoma
6. Kentucky 6. Maryland, North Carolina, North Dakota (tie) 6. North Carolina
7. Louisiana 8. North Dakota, Ohio, Utah (tie) 7. Utah
8. Arkansas 8. South Dakota
9. Utah 9. Kentucky
10. Indiana, North Carolina, Wyoming (tie) 10. Louisiana
Source: KPMG and Tax Foundation Location Matters, 2015