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Doing business in

Ohio

Navigate Ohio’s business landscape with ease—whether you’re incorporating, expanding, or managing tax compliance. Commenda helps you stay ahead with automated solutions for incorporation, compliance, and tax filings.
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ohio

Business Overview

Ohio maintains strong manufacturing traditions while developing new strengths in healthcare, technology, and financial services. The state offers competitive business costs, comprehensive infrastructure, and workforce development programs aligned with industry needs. Its central location supports logistics operations.

Key Facts & Figures

Category Details
Capital Columbus
Major Cities Columbus, Cleveland, Cincinnati, Toledo, Akron
State Sales Tax Rate 5.75%
Local Sales Tax Rate Up to 2.25% additional county and transit taxes
Corporate Income Tax Progressive from 1.41% to 4.31%
Physical Nexus Threshold Physical presence through employees, property, or inventory
Economic Nexus Threshold $100,000 in annual sales or 200 transactions

Did you know?

Ohio is home to seven Fortune 500 company headquarters and has a diverse manufacturing and technology ecosystem.

Setup & Compliance

Ohio offers streamlined business registration with unique tax considerations.

Ohio Business Formation Steps:

  1. Choose Your Business Structure: Consider Ohio’s tax environment for different entity types.
  2. Register Your Business: File formation documents with the Ohio Secretary of State.
  3. Register for Tax Accounts: Register with the Department of Taxation for sales tax and withholding.
  4. Obtain Required Licenses: Research and secure necessary state and local business licenses.
  5. Register as an Employer: Register with the Department of Job and Family Services if hiring employees.

Ongoing Compliance Requirements:

  • Biennial Reports: Most Ohio entities must file biennial reports with the Secretary of State.
  • Sales Tax Collection: Collect and remit 5.75% state sales tax plus applicable local taxes.
  • Commercial Activity Tax: Businesses with gross receipts over $150,000 pay CAT instead of corporate income tax.
  • Municipal Income Tax: Many Ohio municipalities impose income taxes on businesses operating within their boundaries.
  • Professional Licensing: Various professions require specialized licenses through state boards.

Hiring & Payroll

Ohio balances business interests with moderate worker protections.

Ohio Payroll Requirements:

  • Unemployment Insurance: Rates from 0.3% to 7.4% on first $9,500 of wages.
  • State Income Tax Withholding: Required with progressive rates.
  • Workers’ Compensation: Required for most employers.

Ohio Employment Laws:

  • Minimum Wage: $10.10 per hour for employers with annual gross receipts over $342,000.
  • No state-mandated paid sick or family leave.
  • New hire reporting within 20 days.
  • Final paycheck due on next regular payday.
  • Ohio is not a right-to-work state.

State Incentives

Ohio offers comprehensive economic incentives to support business innovation and growth.

Key Business Incentives:

  • Job Creation Tax Credit: Incentives for job creation.
  • Research and Development Tax Credit: Supports innovative company development.
  • Community Reinvestment Area Program: Tax incentives for business development.

Small Business & Startup Support:

  • Ohio Small Business Development Center: Comprehensive business consulting.
  • Minority Business Assistance Program.
  • Technology Validation and Commercialization Grants.

Regulatory Considerations

Ohio maintains a comprehensive regulatory framework supporting diverse business sectors.

Key Business Regulations:

  • Data Privacy: Laws protecting consumer and business information.
  • Environmental Compliance: Regulations for manufacturing and industrial operations.
  • Professional Licensing: Mandatory for various service professions.

Additional Regulatory Areas:

  • Manufacturing and Automotive Industry Compliance.
  • Technology and Innovation Sector Regulations.

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