Spotlight on Ohio local taxes
Ohio has 649 municipalities and 199 school districts that have income taxes. Its state average local tax is second only to Maryland for highest local tax rates. In 2020, local rates range from 0 to 3%, with the higher rates in heavy metropolitan areas such as Cleveland. Columbus and Cleveland’s 2020 local tax rates are both 2.5%.
Ohio residents’ tax burden is further increased by the number of municipalities in Ohio levying local income tax. A staggering 649 out of 900-plus municipalities place a local tax on their residents. A total of 199 school districts also levy local income taxes in Ohio. Businesses and residents both pay municipal income taxes but businesses are only subject to the tax if they makes a profit in an applicable area for more than 20 days.