Ohio trails behind its neighboring states when it comes to this specific tax
As Ohio lawmakers are trying to either update or outright abolish property taxes, a far bigger problem brings down the Buckeye State economically.
According to the Tax Foundation, this is the Commercial Activity Tax, a 0.26% gross receipts levy on business revenues over $6 million, which hits companies on every dollar of sales — profitable or not — causing costs to pyramid through supply chains.
The fact that this tax damages Ohio becomes even clearer when you compare Ohio to its neighboring states. The Tax Foundation’s 2026 State Tax Competitiveness Index ranked Ohio No. 39.
On the other hand, every state that shares a border with Ohio is doing better: Indiana is at No. 10, Michigan at No. 16, Kentucky at No. 25, West Virginia at No. 30, and Pennsylvania at No. 36.
The nonprofit said that other states are doing better than Ohio because they either limit or even reject the broad gross receipts tax that Ohio still has. Indiana imposes none at all; Michigan scrapped its version in 2011; Kentucky has a narrow entity-level minimum taxation; and West Virginia and Pennsylvania restrict such levies to specific industries or municipalities.
The Commercial Activity Tax could result in Ohio businesses struggling, which would cost the state thousands of potential jobs, since nobody would be hiring.
Without a shift to a profits-based system, even aggressive property-tax relief may not help Ohio residents economically.
Instead of dealing with the Commercial Activity Tax, Ohio lawmakers target property taxes, with the Ohio Senate, for example, passing House Bill 124 on Nov. 12 that would allow county auditors to override state-mandated valuations. Among the bills the lawmakers passed were House Bills 129, 186, 309, 335, 355, and 608.
“These bills take meaningful steps to rein in property tax growth, bring more transparency to local levies, and ensure homeowners, especially seniors, are not being priced out of their communities,” state Rep. Brian Lorenz, R-Powell, said in a release. “This is a strong start. I will continue fighting for conservative, commonsense reforms that protect taxpayers and keep Ohio affordable for the families who built it.”
Additionally, Cuyahoga County now offers up to $10,000 in direct aid to delinquent seniors aged 67 and older. Similar programs are available in Lake and Lorain counties.
Some lawmakers and activists also previously introduced other solutions, such as 30-day grace periods, 60% voter thresholds for new levies or even full property-tax abolition in exchange for massive sales-tax hikes. However, many lawmakers concede that they likely won’t become law.
