State Tax Comparison: Ohio vs. Neighboring States
A comprehensive analysis of tax rates across Ohio, Indiana, Pennsylvania, Kentucky, Michigan, and West Virginia to help you make informed financial decisions.
Executive Summary
Key Findings
- Ohio is highly competitive, especially for low-to-middle incomes, with **no income tax on the first $26,050**.
- Indiana maintains a very low overall tax burden due to its low flat income tax (3.15%) and moderate property taxes.
- Pennsylvania has the lowest flat income tax rate (3.07%), but this is offset by some of the **highest property taxes** in the region.
- West Virginia has become more competitive with significant income tax cuts, but still has the highest top marginal rate (5.12%).
The Bottom Line
No single state is the “best” for everyone. Ohio offers a balanced and progressive system that strongly favors lower and middle-income households. Indiana is a top contender for its simplicity and low overall burden. High earners may find Pennsylvania’s low flat rate appealing, but must factor in its high property taxes.
Income Tax Comparison
Top Marginal Income Tax Rates (2024)
Ohio (Progressive)
0% – 3.75%
- $0 – $26,050: 0%
- $26,051 – $100,000: 2.75%
- Over $100,000: 3.75%
- Note: Simplified 2024 brackets. Very favorable for lower incomes.
Indiana (Flat)
3.15%
- Simple flat rate for all income levels.
- Counties can levy additional income taxes.
- Personal Exemption: $1,000
- Additional Exemption: $1,500
Pennsylvania (Flat)
3.07%
- Lowest flat rate in the group.
- Most municipalities add a local Earned Income Tax (EIT).
- No standard deduction or personal exemptions.
Kentucky (Flat)
4.0%
- Rate reduced from 4.5% in 2024.
- Standard Deduction (2024): $3,160
- Simple and predictable for all incomes.
Michigan (Flat)
4.05%
- Rate reduced from 4.25%.
- Personal Exemption (2024): $5,400
- Some cities (e.g., Detroit) levy a local income tax.
West Virginia (Progressive)
2.36% – 5.12%
- $0 – $10,000: 2.36%
- $10k – $25k: 3.15%
- $25k – $40k: 3.54%
- $40k – $60k: 4.72%
- Over $60,000: 5.12%
Sales Tax Comparison
Average Combined Sales Tax Rates (2024)
Sales Tax Breakdown
| State | State Rate | Avg. Local Rate | Combined Avg. |
|---|---|---|---|
| Ohio | 5.75% | 1.49% | 7.24% |
| Indiana | 7.00% | 0.00% | 7.00% |
| Pennsylvania | 6.00% | 0.34% | 6.34% |
| Kentucky | 6.00% | 0.00% | 6.00% |
| Michigan | 6.00% | 0.00% | 6.00% |
| West Virginia | 6.00% | 0.54% | 6.54% |
Property Tax Comparison
Effective Property Tax Rates
Ohio
1.42%
Median home value: $217,300
Median annual tax: $3,086
Indiana
0.82%
Median home value: $231,800
Median annual tax: $1,901
Pennsylvania
1.49%
Median home value: $275,300
Median annual tax: $4,102
Kentucky
0.85%
Median home value: $205,800
Median annual tax: $1,749
Michigan
1.32%
Median home value: $257,500
Median annual tax: $3,399
West Virginia
0.59%
Median home value: $156,800
Median annual tax: $925
Calculate Your Tax Burden
Use our interactive calculator to get a personalized tax estimate across all six states.