January 13, 2015


State & Local Taxes in 2015


Ohio Tax Code Features

Progressive Features

• Graduated personal income tax structure

• Provides an income tax credit for those with income of $10,000 or below

• Provides a limited, nonrefundable 10 percent Earned Income Tax Credit (EITC)

• Sales tax base excludes groceries

Regressive Features

• Imposes a gross receipts tax in lieu of a corporate profits tax

• Fails to provide refundable income tax credits to offset sales, excise, and property taxes

Tax Changes Enacted in 2013 & 2014

• 10 percent across the board personal income tax rate reduction

• Introduced 50 percent personal income tax exemption for pass-throughbusiness income

• Increased personal exemption for low- and middle-income taxpayers, means-tested $20 personal exemption credit, enacted a 5 percent capped non-refundable EITC in 2013 and increased it to 10 percent in 2014

• Sales tax rate increase

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Ohio has the 18th most unfair state and local tax system in the country. States with regressive tax structures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Appendix B for state-by-state rankings and more details).

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