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Study: Ohio is a friendly tax environment for businesses

Written on Jun 25, 2018

Ohio is just outside the top 10 of a new ranking of the business tax burdens in all 50 states and the District of Columbia.

Anderson Economic Group compiled the report which measures 11 categories of taxes paid by business. (Of those, property and sales taxes are the largest taxes paid by businesses.) The report is based on data from 2016.

The 2018 Business Tax Burden Rankings report shows Oklahoma, Oregon and North Carolina have the lowest business tax burdens nationwide, with tax collections of 6.6%, 6.8% and 6.9%, respectively, of business operating margins. The report showed that the five states with the lowest business tax burden all collected 7% or less of business operating margin, while the five states with the highest tax burden collected 12.3% or more of operating margin.

The U.S. average was 9.4%.

Ohio ranked 11th, with a tax burden of 7.8%. Only Indiana (7%) and Michigan (7.5%) offered lower tax burdens among states in the industrial Midwest.

Additional findings:

  • U.S. businesses paid $661.1 billion in state and local taxes in 2016
  • Nationally, property taxes and general sales taxes make up the largest share of state and local business tax burden, accounting for over 60% of total state and local taxes paid by businesses in 2016
  • Business tax reliance varies considerably among states, with business taxes accounting for less than 31% of all taxes collected in Maryland and over 71% in North Dakota. In Ohio, that figure is 38.1%.