Ohio tax changes kick in Sunday
LISBON – Starting Sunday, it will cost more to make everyday purchases in Ohio and Columbiana County, but at the same time workers will also begin to pay less in state income taxes.
Sept. 1 is when the state sales tax increases by 0.25 percent, to 5.75 percent, the first such increase since 2003. The rate locally increases to 7.25 percent because of a combined 1.5 percent county sales tax.
This means you will pay an extra 25 cents in taxes for every $100 spent in the county on almost all goods and services except things such as groceries, housing, medication and home heating bills.
“If you eat out, you’ll pay more. If you purchase a motor vehicle, you’ll pay in sales taxes. It affects a lot of stuff,” said John Goempel, chief deputy county auditor.
The increase was included in the recently passed two-year state budget that went into effect July 1 and part of a package of changes that will reduce taxes on individuals and businesses over the next three years. This includes the phase in of a 10 percent cut in the individual state income tax, also starting Sept. 1.
According to the Ohio Department of Taxation, 35 percent of the average Ohio household spending is subject to the sales tax, but those making large purchases will notice it the most. For example, someone purchasing a $25,000 vehicle will pay an extra $62.50 in taxes.
Of the 45 states with a sales tax, Ohio currently is about in the middle and will remain so even after the increase.
Meanwhile, the state income tax will be cut by 8.5 percent initially, with the reduction increasing to 10 percent in 2015. The current top tax rate is 5.92 percent for a couple earning more than $204,000 a year.
The income tax cut will result in a $45 savings for a single filer earning $25,000 a year and $117 for someone whose income is $50,000, according to the taxation department. The Columbus Dispatch reports the people in these same income brackets will also pay an average of $20 to $28 per year in additional sales taxes on average.
Goempel said the county will not have to absorb the cost of changing cash registers and scanners to reflect the sales tax increase.
“We don’t have to pay for it. We only have to pay for it if there is a change in the county sales tax. When the state (tax) changes it’s at the vendor’s cost,” he said.
– The Associated Press and Columbus Dispatch contributed to this story.