Operating a business in Ohio requires a solid understanding of the state's tax framework. The base state sales tax rate is 5.75%, with local jurisdictions adding up to 2.25%. LLC formation costs $99 in 2026.
Economic Nexus in Ohio
Remote sellers must collect Ohio sales tax if they exceed $100,000 in annual sales or 200 transactions within the state. This threshold has been in effect since 2018-01-01. Marketplace facilitators like Amazon and Etsy are also required to collect and remit tax on behalf of third-party sellers. The Ohio Department of Taxation enforces these provisions and provides registration guidance at https://tax.ohio.gov.
LLC Formation in Ohio (2026)
Forming an LLC in Ohio costs $99 for the initial filing. There is no annual franchise tax, keeping ongoing costs low. Ohio has no state income tax, making it attractive for LLC owners seeking tax efficiency.
The process involves filing Articles of Organization with the Secretary of State, obtaining a federal EIN, and registering for applicable state tax accounts. You will also need a sales tax permit from the Ohio Department of Taxation.
Key Tax Rules
• Ohio has a 5.75% state sales tax rate.
• County taxes add 0.75% to 2.25%, for combined rates up to 8%.
• Ohio has no state income tax on wages (Commercial Activity Tax applies to businesses).
• Economic nexus: $100,000 in sales or 200 transactions.
Sales Tax Exemptions
The following categories are generally exempt from sales tax in Ohio: groceries, prescription drugs, medical devices. Businesses should maintain proper documentation for exempt transactions.