November 26, 2014

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Ohio sales tax to rise one-quarter percent Sunday

COLUMBUS, Ohio — Shoppers across Ohio will see a one-quarter percent sales tax increase beginning Sunday, the first increase in the tax in a decade.

The rate will rise from 5.5 percent to 5.75 percent, or 25 cents for every $100 spent, on vehicles, electronics, clothing and other retail goods.

Ohio lawmakers approved the increase as part of the state’s $62 billion, two-year state operating budget. The increase is part of a larger package of tax adjustments that will reduce overall business and individual taxes by an estimated $2.7 billion over the next three years. That includes a 10 percent cut to the personal income tax that will be phased in starting Sunday.

Policy Matters Ohio, a liberal think tank in Cleveland, has estimated that the income-tax cuts would result in the top 1 percent of Ohio wage earners on average receiving $6,000 a year while the bottom fifth of wage earners would have to pay $12 a year.

During budget debate this year, the group proposed that Ohio offer a sales-tax credit for lower income families as a targeted way to help offset some of the impact of tax changes on poorer Ohioans. Five states offer such credits.

The Ohio Department of Taxation estimates that only 35 percent of an average Ohio family’s spending is subject to the sales tax. Groceries, housing, medicines, education and many other purchases are exempt from sales taxes. Even with the latest change — Ohio’s first increase since 2003 — the state’s rate is still lower than about half the U.S. states.

Ohio first enacted a sales tax in 1935. The rate then was 3 percent. The rate rose to 4 percent in 1967 and to 5 percent in 1981, according to information from the state Tax Department.

In 2003, state lawmakers temporarily tacked a penny onto the tax — raising the rate to 6 percent for the next two years. In 2005, it was dropped to 5.5 percent.


  • Joe Smith

    Raising taxes instead of making cuts….nice

    • Denise Caruloff

      that is the American way….:) but I am ok with it..have no choice really.

    • Reeeally309

      Did you not read the article? It’s part of a tax adjustment package, they are cutting business and individual taxes, 10% cut to personal income tax. The increase to sales tax is so small, why complain? It hasn’t been increased in 10 years and we’re still lower than most of the US.

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  • oldruss

    The sales tax is part of an overall tax revision. It it suppose to include a reduction in personal income taxes, but the reductions are only being phased-in, while the sales tax increase goes into effect on Sunday.

    It would be helpful if the Associated Press, which “authored” this article, could give us a break-down by income groups as to how much the net increase or decrease in overall taxes (sales and income) is estimated to be. Not everyone pays the same sales tax, as our buying patterns differ, but I have confidence that Associated Press can come up with a median figure for the various income groups.

    If the full income tax reductions are not effective at the same time as the sales tax increase, then there may very well be a net increase in our taxes. And, that, will be unacceptable.

  • Bob Owens

    Disproportionately hurts the poor and middle class. I can imagine the howling on here if this were done under a Democratic governor.

  • KZ14

    I’m sure most of us are in the bottom 5th. More money to give away from us tax payers who actually work.

  • Michael A. Figueroa

    Oh! Wait, I thought those wonderful Republicans were against raising taxes?!

  • Switchthefield

    This is the Republican concept of “cutting taxes” and being “fiscally conservative” and responsible. Republicans say these things and then …

    1. They RAISES TAXES taxes on middle class American, who pay more sales tax.
    2. They INCREASE SPENDING. Gov. Strickland’s budget was $55 Billion.
    3. They cut services (local schools and government). Raise your hand if you have not seen your local government taxes and school levies increase in the last 2-3 years.

    My grandfather use to have a gross but applicable saying … “Do not pee down by shirt and tell me it’s raining.” I only hope that the voting public is paying attention to facts instead of spin.