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March 12, 2008 - State Tax Burden Falls to 38th in the Nation

COLUMBUS, Ohio - The state tax burden in Ohio fell to 38th in the nation last year when ranked on a per capita basis, according to a new report.  

The new ranking, published by the Federation of Tax Administrators last week, represents a marked decline from 2005, when Ohio’s per capita state tax burden ranked 27th.  

Ohio Tax Commissioner Richard A. Levin said the falling ranking is an unmistakable result of the tax cuts enacted by the Ohio General Assembly in 2005 and embraced by Governor Ted Strickland.  

“These tax reforms are clearly having an impact, and we are seeing that impact in these new numbers,” Levin said. “Most states have a higher state tax burden than we do.”  

The FTA report also shows that Ohio’s per capita state tax burden is now lower than any of its neighboring states. Indiana, at 35th, was nearest to Ohio, according to the FTA report.  

Ohio’s five-year tax reform includes a 21 percent cut in state income tax rates and the elimination of the corporation franchise tax in favor of a commercial activity tax with a low rate and a broad base. It also includes the elimination of the tangible personal property tax, Ohio’s largest local business tax.  

The Federation of Tax Administrators, an association of the nation’s state tax agencies, developed its comparison of state tax burdens based on data from the U.S. Census Bureau. The new FTA analysis, for 2007, only compares state tax burdens; the organization’s last analysis of state and local tax burdens was for 2005, before Ohio’s tax reform package began taking effect.  

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Note: Tables showing how the state tax burden in Ohio compares to other states are available at:

Ohio's state tax burden March 2008 PDF

The original FTA analysis is available at http://www.taxadmin.org/fta/rate/burden.html