2026 tax burden by state out from WalletHub — see how Ohio fares

A new report, once again, shows that residents in Democrat-run states bear the highest tax burden — measured as a percentage of total income relative to taxes paid to the state.

The WalletHub report also shows Ohio’s tax burden continuing its downward trend, dropping from the 15th-highest to the 16th-highest in the nation. The decline in tax burden reflects what Republicans say are key legislative efforts now delivering meaningful relief, especially for renters and low-wage earners who often feel the pinch of embedded costs the most.

According to the latest 2026 data from the Tax Policy Center via WalletHub, Ohio’s overall state and local tax burden stands at 9.05% of personal income, down from 9.36% in 2025. This marked improvement over the prior year stems primarily from key legislation, passed in 2025, now beginning to take effect.

The fiscal 2026-27 state budget advanced a flatter individual income tax, moving toward a 2.75% rate on most non-business income above roughly $26,050. When the proposal to simplify the income tax was introduced in 2023, economists estimated it would boost GDP by billions of dollars. While it’s too soon to gather data on flat-tax impacts, new property tax reforms are already showing early signs of stabilizing housing markets—property taxes are one of the largest costs baked into monthly rents.

Republican Gov. Mike DeWine signed a package of property tax relief bills in December 2025 that cap automatic school and local tax increases at the rate of inflation, prevent property tax increases without a vote, and adjust credits to provide more predictable bills starting in 2026. In one year, Ohio dropped from the 22nd highest property tax burdened state to 24th, with WalletHub showing just 2.62% of total income flowing to property taxes.

That’s good news for the state’s renters and lowest-wage earners, who spend an average of 50% or more of their total income on housing, as studies show that property taxes are passed on to renters.

While they differ by state, rental properties such as apartment complexes and second homes are considered investment properties. On average, apartments pay about 44% higher property tax rates than owner-occupied primary residences. According to a recent Federal Reserve study, the tax burden is passed directly to renters, baked into the cost of rents, and when property taxes increase, up to $0.89 of every additional dollar ends up in a rent increase. The higher the property taxes go, the higher the rents increase.

In some areas, progressive lawmakers have attempted to control rents rather than rein in their own spending. However, studies show these regressive rent capping efforts have backfired, resulting in housing shortages, homelessness, and skyrocketing costs.

A 2019 Stanford study on San Francisco’s rent control expansion showed rent-controlled buildings were more likely to convert out of the rental market. As owners sold, San Francisco’s rental inventory fell by 15%, actually contributing to higher citywide rents. San Francisco now leads the nation in all-time highest rent increases amid housing shortages, up 18.4% for one-bedrooms and 22.6% for two-bedrooms, according to Zumper’s Annual National Rent Report.

By capping property tax increases, however, Ohio’s reforms avoid these supply-reducing regulations, helping more low-wage renters stay housed without facing sudden spikes. While local municipal taxes and other factors remain, Ohio’s rental market is already showing early signs of housing stability and cost predictability for working families across the state.

Released March 24, Zumper’s data shows Ohio among the nation’s top “fallers” as the median price for a one-bedroom apartment dropped by 4.2% from 2025, in cities like Cleveland.

In Columbus, costs have been even softer in some segments, with medians cooling to the point that 45.3% of rental listings now offer concessions. Cincinnati and Cleveland remain among the most affordable markets in the Midwest.

Statewide, average apartment rents have stabilized at a median rate of $1,334 as of early 2026, while vacancy rates signal availability — a marked difference from neighboring states like Minnesota, which saw a 5% jump in rents amid low rental inventory.

Property taxes also have sizable impacts on commercial businesses, according to U.S Census Bureau research on urban retailers. When annual costs, such as income and property taxes, are reduced, retailers have more wiggle room to offer competitive prices.

While Buckeye lawmakers made no major rate cuts, Ohio’s sales and excise tax burden still edged slightly lower from 4% in 2025 to 3.88% of personal income in 2026, according to WalletHub. That reduction of total income going toward sales and excise taxes is likely explained by an overall reduction in retailer costs resulting from the focused relief on income and property taxes, according to the Census Bureau’s study.

This compares favorably to similar states like Illinois, which ranks 6th in the nation for the highest tax burden but 18th, just below Ohio at 3.77%, for total income going to sales and excise taxes.