Last updated: April 30, 2026

Starting a Business in Ohio: Licenses, Permits & Requirements (2026)

Four things make starting a business in Ohio structurally different from most other states. First, Ohio’s LLC costs $99 to form and zero to maintain – Ohio is one of the very few states with no annual report or recurring filing fee for LLCs. Second, Ohio just flipped to a flat 2.75% personal income tax effective January 1, 2026, the second-lowest flat rate in the country (only Arizona is lower at 2.5%). Third, Ohio’s Commercial Activity Tax now exempts any business with under $6 million in Ohio gross receipts – approximately 90% of Ohio businesses no longer file CAT. Fourth, Ohio is a monopolistic workers’ compensation state – private workers’ comp insurance is illegal in Ohio, and coverage must come from the state-run Bureau of Workers’ Compensation (BWC). Only three other states do this (North Dakota, Washington, Wyoming).

This guide compiles the specific Ohio agency requirements, portal links, fee amounts, and city-level variations for starting a business in Ohio in 2026. Sources include the Ohio Secretary of State, Ohio Department of Taxation, Ohio Bureau of Workers’ Compensation, Ohio Department of Job and Family Services (ODJFS), and Ohio Department of Commerce.

Ohio Business Requirements at a Glance

Requirement	Agency / Portal	Cost	Timeline
LLC Articles of Organization (Form 533A)	Ohio Business Central (Secretary of State)	$99 online	3-7 business days standard; same-day +$100; 1-hour +$300
Annual Report (LLC)	Ohio Secretary of State	Not required – Ohio LLCs file none	N/A
Trade Name (DBA)	Ohio Secretary of State	$39 (5-year term)	Online filing
Federal EIN	IRS.gov	Free	Immediate online
Vendor’s License (sales tax)	Ohio Business Gateway or county auditor	$50 (raised from $25 on April 9, 2025)	Required before collecting sales tax; no renewal needed
Commercial Activity Tax (CAT) registration	Ohio Business Gateway	0.26% above $6M Ohio gross receipts; under $6M = no CAT	Within 30 days of crossing threshold
Unemployment Insurance (ODJFS)	The SOURCE	New employer 2.7% (construction 5.6%); $9,500 wage base 2026 + 0.15% surcharge	Register before first payroll
Workers’ Compensation (BWC)	Ohio Bureau of Workers’ Compensation	$120 minimum opening deposit; rates vary by class code	Required before any employee’s first day – no private market
Municipal Income Tax (employer withholding)	City Division of Taxation, RITA, or CCA	Columbus 2.5% / Cleveland 2.5% / Cincinnati 1.8% / Akron 2.5% / Toledo 2.25% / Dayton 2.5%	Withhold from wages of employees working in that city
State Professional License (industry-specific)	OCILB, Cosmetology Board, PISGS, ODJFS Child Care, ODA Pesticide	Varies	Before practicing in licensed profession

How to Start a Business in Ohio (Step by Step)

Step 1: Form Your Ohio LLC

File Articles of Organization (Form 533A) online through the Ohio Business Central portal at the Ohio Secretary of State. Filing fee: $99. Standard processing runs 3-7 business days. Expedited service: same-day processing for an additional $100, or 1-hour processing for an additional $300.

Your LLC name must include “LLC,” “L.L.C.,” or “Limited Liability Company” and must be distinguishable from existing entities on file. Run a name search through the Ohio Business Central portal before filing. Optional name reservation: $39 holds a name for 180 days.

Statutory agent (Ohio’s term for registered agent): Your LLC must designate a statutory agent with a physical street address in Ohio. You can serve as your own statutory agent if you have an Ohio address, or hire a third-party registered agent service. P.O. boxes are not acceptable.

No annual report required. This is a real cost advantage versus most other states. Ohio LLCs do not file an annual report, biennial report, or franchise tax. Once your $99 filing is accepted, your LLC stays in good standing as long as your statutory agent designation remains current. Compare to Pennsylvania (now $7/year under Act 122 of 2022), New York ($9 biennial plus the LLC publication requirement), or California ($800 annual minimum franchise tax). Ohio’s zero-recurring-fee structure is among the cheapest LLC maintenance models in the country.

Trade Name (DBA): If you operate under a name different from the LLC’s legal name, file a Trade Name Registration with the Ohio Secretary of State for $39. The trade name lasts 5 years. Sole proprietors and general partnerships using a fictitious name typically register with both the Secretary of State and the county recorder where the business is located.

Get your free federal EIN immediately at IRS.gov after your LLC is approved. You need it before opening a business bank account, registering for state taxes, or hiring employees.

Step 2: Register for State Taxes Through the Ohio Business Gateway

Ohio’s unified portal for tax registration is the Ohio Business Gateway (gateway.ohio.gov). Use it to obtain your vendor’s license, set up employer withholding, and register for Commercial Activity Tax if you cross the threshold.

Ohio Sales Tax and the Vendor’s License

Ohio’s state sales tax rate is 5.75%. Counties add a local sales tax of 0.75% to 2.25%, putting combined rates between 6.50% and 8.00%. The highest rates are in Cuyahoga County (Cleveland) and Franklin County (Columbus) at 8.00%, then Hamilton County (Cincinnati) at 7.80% and Lucas County (Toledo) at 7.75%.

• Vendor’s License fee: $50, one-time, no renewal required. The fee was raised from $25 to $50 effective April 9, 2025 under House Bill 366; the increase funds the Organized Crime Commission Fund. Get it through the Ohio Business Gateway or your county auditor’s office.
• Service businesses: Ohio taxes some services that other states do not – building cleaning and janitorial services, employment placement, landscaping and lawn care for non-agricultural property, and several others under ORC § 5739.01(B)(3). If you run a cleaning, landscaping, or staffing business in Ohio, expect to collect sales tax on most invoices.
• Use the Ohio Department of Taxation Finder to confirm the combined rate for any address in Ohio.

Ohio Personal Income Tax – The 2026 Flat Rate

This changed substantially this year. Ohio’s biennial budget (signed by Governor DeWine on June 30, 2025) replaced Ohio’s prior progressive income tax with a flat 2.75% rate effective January 1, 2026. The 0% bracket on the first $26,050 of nonbusiness income remains in place; above that, all income is taxed at 2.75%. Ohio is now the second-lowest flat-tax state in the country – only Arizona’s 2.5% is lower.

Ohio Business Income Deduction: Ohio’s pass-through business owners (LLC members, S-corp shareholders, partners, sole proprietors) get a $250,000 Business Income Deduction on the first $250,000 of qualifying business income (or $125,000 for married filing separately). Business income above the deduction is taxed at a flat 3%. This treatment is structurally distinct from how the 2.75% personal rate applies to wages – if you take a salary from your S-corp, the salary portion is taxed at 2.75%, but profit distributions claimed as business income flow through the deduction first, then 3% on anything above.

No Ohio corporate income tax. Ohio replaced its corporate franchise/income tax with the Commercial Activity Tax in 2005 – C-corps doing business in Ohio pay no separate corporate income tax, only the CAT (which most small businesses no longer owe).

Commercial Activity Tax (CAT) – Now Exempts ~90% of Ohio Businesses

Ohio’s Commercial Activity Tax is a 0.26% gross receipts tax. House Bill 33 of 2023 dramatically restructured it:

• 2024 exclusion: $3 million in Ohio gross receipts
• 2025 and beyond: $6 million in Ohio gross receipts
• Result: Approximately 90% of Ohio businesses are no longer subject to the CAT. The Ohio Department of Taxation actively recommends canceling your CAT account if you expect $6 million or less in gross receipts.
• Above $6 million: 0.26% on receipts exceeding the threshold; quarterly returns; register through the Ohio Business Gateway within 30 days of crossing the threshold

For most small business owners reading this guide, the CAT is now a non-event. The major exception: if you operate a high-volume, low-margin business (a wholesale distributor, large landscaping contractor, food delivery aggregator, etc.), gross receipts can cross $6 million quickly even on thin margins.

Step 3: Workers’ Compensation Through the BWC (Monopolistic State)

This is the single most distinctive piece of Ohio employment law. Ohio is one of only four monopolistic workers’ compensation states in the United States (with North Dakota, Washington, and Wyoming). Private workers’ compensation insurance is illegal in Ohio – all coverage must come from the state-run Ohio Bureau of Workers’ Compensation (BWC) or, for very large employers meeting strict criteria, through state-approved self-insurance.

BWC Requirement	Detail
Coverage trigger	One or more employees – including part-time, seasonal, and family members
Where to enroll	info.bwc.ohio.gov – eBusiness portal U-3 application
Minimum opening deposit	$120
Premium calculation	Manual class code rate × payroll ÷ $100, adjusted by experience modifier and group rating
True-up deadline	August 15 each year – report actual payroll vs. estimated
Premium installments	Monthly, quarterly, semi-annual, or annual options
2026 rate change	1% rate cut for private employers effective July 1, 2026 (~$10M total reduction); public employers got a 1% cut Jan 1, 2026

BWC discount programs unique to Ohio: The Drug-Free Safety Program, Group Rating, Group Retrospective Rating, Industry-Specific Safety Program, and Destination: Excellence can each reduce premiums substantially. Group Rating is the largest – many small employers join a sponsored group through their trade association or chamber of commerce to qualify for discounts not available to standalone employers.

Penalties for operating without BWC coverage: Retroactive premium assessment for the entire uncovered period, plus a penalty up to 10x the missing premium for intentional violations, plus personal liability for any workplace injury claim that occurs while uncovered. The lapse exposure is significant.

Step 4: Register for Unemployment Insurance with ODJFS

Ohio unemployment insurance is administered by the Ohio Department of Job and Family Services (ODJFS) through The SOURCE employer portal at thesource.jfs.ohio.gov.

• New employer rate: 2.7% (5.6% for construction)
• Experience-rated range: 0.4% to 10.1%
• Taxable wage base 2026: $9,500 (increased from $9,000 effective January 1, 2026)
• 2026 surcharge: Additional 0.15% technology and customer service fee on the first $9,000 of wages per employee, in effect from January 2026 through December 2027 (under SB 6 of the 136th General Assembly)
• New hire reporting: All new hires must be reported to the Ohio New Hire Reporting Center within 20 days under ORC § 3121.89

The combination of the wage base increase and the new 0.15% surcharge means Ohio employers are paying more in 2026 than they did in 2025 even at the same experience rate. Build the higher rates into payroll projections.

Step 5: City and County Licensing

Local Business Registrations

Ohio has no statewide general business license, but most municipalities require some form of local registration. The major metro requirements:

• Columbus (Franklin County): No general business license, but Columbus collects its own 2.5% municipal income tax through the Columbus Division of Taxation – separate from state income tax. Withholding is mandatory for any business with employees performing work in Columbus city limits. Most regulated industries require permits through the City of Columbus Building & Zoning Services or Columbus Public Health.
• Cleveland (Cuyahoga County): 2.5% municipal income tax administered by the Central Collection Agency (CCA). The City of Cleveland Department of Building and Housing handles construction-trade licensing including a separate city HVAC contractor license. Cuyahoga County Board of Health handles food service licensing including food trucks.
• Cincinnati (Hamilton County): 1.8% municipal income tax, the lowest of the three major cities. Cincinnati Buildings & Inspections issues a separate Heating and Ventilating Contractor License. Cincinnati Health Department licenses food trucks separately from county jurisdictions in surrounding areas.
• Toledo (Lucas County): 2.25% municipal income tax. Toledo collects its own.
• Akron (Summit County): 2.5% municipal income tax through RITA.
• Dayton (Montgomery County): 2.5% municipal income tax through RITA.

The Ohio Municipal Income Tax Maze

Ohio is one of only a handful of states where most municipalities can levy their own income tax on top of the state. Ohio law caps municipal income tax at 1% without voter approval; rates above 1% (which most major cities have) require voter-approved levies. Two regional collection agencies handle most of the administration:

• RITA (Regional Income Tax Agency) at ritaohio.com serves more than 330 Ohio municipalities, primarily in central and northeast Ohio. Akron, Dayton, and many suburbs use RITA.
• CCA (Central Collection Agency) at ccatax.ci.cleveland.oh.us serves Cleveland and ~50 other cities in northeast Ohio.
• Self-administered: Columbus collects its own through the Columbus Division of Taxation. Cincinnati and Toledo also collect their own.

The practical implication: if you have employees who work in multiple Ohio cities, you may have to file with multiple agencies. A construction or HVAC business that serves the entire Cleveland-Akron metro will commonly file with both CCA and RITA, plus directly with cities that opt out of both. Use the Ohio Department of Taxation Finder (Municipal Tax tab) to confirm the rate and collection agency for any work address in Ohio.

State Professional Licenses

Ohio licenses individual industries through agency-specific boards. Common ones for small business operators:

• HVAC contractors (commercial work): Ohio Construction Industry Licensing Board (OCILB) issues commercial HVAC, electrical, plumbing, hydronics, and refrigeration licenses. Residential HVAC has no state license – it falls to city-level licensing in Columbus, Cleveland, Cincinnati, Toledo, Akron, and Dayton (each separate).
• Cosmetologists, barbers, estheticians, nail technicians: Ohio Cosmetology and Barber Board – combined since House Bill 49 of 2017 merged the previously separate boards.
• Private investigators and security guards: Ohio Private Investigator Security Guard Services (PISGS) under the Ohio Department of Public Safety, licenses under ORC Chapter 4749.
• Childcare providers: ODJFS Office of Child Care under OAC Chapter 5101:2-12, with Step Up to Quality five-star rating.
• Pesticide applicators: Ohio Department of Agriculture Pesticide and Fertilizer Regulation under ORC Chapter 921.

Ohio’s Distinctive Tax and Payroll Environment

Three structural features of Ohio’s tax and payroll system shape startup planning differently than they would in neighboring states:

1. The BWC monopoly removes one major variable – and adds another. Workers’ comp is a fixed-channel decision in Ohio (BWC, no shopping). On one hand, this simplifies setup – no quotes, no broker, no comparison shopping. On the other hand, premiums depend heavily on whether you join a Group Rating program through a trade association or chamber, and businesses that try to handle BWC enrollment without joining a group typically pay 30-60% more than they need to. Plan to research group rating options before your first employee starts.

2. The municipal income tax stack is unique to Ohio and Pennsylvania. Most states give you state income tax and that’s it. Ohio adds a 1.5% to 2.5% municipal layer on top, often administered by RITA or CCA rather than the city itself, with separate filing requirements. For a business with employees working in multiple cities, payroll setup is materially more complex than in most other states. The flat 2.75% state rate looks very low until you add 2.5% Cleveland or 2.5% Columbus on top.

3. Ohio still has no state-mandated paid family leave. A bipartisan Senate Bill 396 introduced in April 2026 would create a 14-week paid leave program funded by a ~0.4% payroll contribution starting in 2028, but it has not had committee hearings yet and is not law. For now, Ohio employers can plan around just federal FMLA (unpaid, 50+ employee threshold) rather than the state programs in Colorado, Washington, Massachusetts, New York, New Jersey, or Oregon. This is a real cost advantage when comparing Ohio to those states.

Ohio Market Context: The Three Cs and the Intel Effect

Columbus (population ~907,000 city, ~2.2M metro): Fastest-growing major Midwest city. State capital and home to Ohio State University, Nationwide, JPMorgan Chase’s largest office, Honda Marysville Auto Plant, and Anheuser-Busch’s largest brewery. The big near-term inflection: Intel’s $20 billion semiconductor fabs in Licking County (New Albany) are under construction, with the first fab scheduled to come online in the late 2020s. Service businesses in the Columbus metro – cleaning, HVAC, food trucks, daycare – are positioning for sustained construction-phase and operations-phase demand. Sustained residential growth across Delaware, Union, and Franklin counties drives ongoing service demand.

Cleveland (population ~363,000 city, ~2.1M metro): Cleveland Clinic anchors a healthcare ecosystem that’s the largest single employer in Ohio. Manufacturing (Sherwin-Williams, Eaton, Parker Hannifin, Lincoln Electric) and logistics fill out the base. Cleveland’s downtown and University Circle are the dense, walkable cores; the suburbs run from upscale (Westlake, Solon, Hudson) to working-class (Parma, Lakewood). Cleveland-area food truck and salon businesses face a tighter year-round operating window because of Lake Erie weather, and a shorter outdoor festival season than Columbus or Cincinnati.

Cincinnati (population ~309,000 city, ~2.3M metro): Procter & Gamble, Kroger, Fifth Third Bancorp, Macy’s, and Western & Southern are all headquartered here. The metro spans into Northern Kentucky (Boone, Kenton, Campbell counties) and southeast Indiana (Dearborn County), so a Cincinnati business often serves clients in three states – which complicates licensing, sales tax, and payroll. Over-the-Rhine is one of the country’s largest concentrations of restored 19th-century architecture and supports a dense small business district.

Toledo, Akron, Dayton: Mid-sized markets each with their own anchors – Toledo has Owens-Illinois and Jeep, Akron has Goodyear and the University of Akron, Dayton has Wright-Patterson Air Force Base (the largest single-site DoD employer in the country) and a growing aerospace/defense contractor cluster.

Lake Erie tourism: Sandusky (Cedar Point), Put-in-Bay, and the Lake Erie islands generate heavy seasonal demand for food trucks, cleaning services, and short-term rentals. Operators who treat the Front-Range-of-Ohio coastline as a separate market from year-round Toledo or Cleveland tend to do better.

Ohio Business Guides by Industry

Each industry has different licensing, permits, taxes, and insurance requirements in Ohio. Choose your business type:

• How to Start a Cleaning Service in Ohio – sales tax on building cleaning under ORC § 5739.01(B)(3)(p), BWC Class 9014/9015, Ohio Business Gateway vendor’s license
• How to Start a Food Truck in Ohio – county-level Mobile Food Service Operation licensing, ORC § 3717.42-44, Cuyahoga/Franklin/Hamilton County health department permits
• How to Start a Daycare in Ohio – ODJFS Office of Child Care Type A/B/center licensing under OAC 5101:2-12, Step Up to Quality 5-star rating, BCI/FBI fingerprint background check
• How to Start an HVAC Business in Ohio – OCILB commercial license vs. city-level residential licensing in Columbus, Cleveland, Cincinnati, Toledo, Akron, Dayton; EPA 608; A2L refrigerant transition
• How to Start a Hair Salon in Ohio – Ohio Cosmetology and Barber Board (combined since 2017), 1,500-hour cosmetology, salon license per location, boutique services license
• How to Start a Landscaping Business in Ohio – sales tax on landscape services under ORC § 5739.01(B)(3)(q), ODA Pesticide Applicator License under ORC Chapter 921, Ohio811 (OUPS) 48 working hours notification
• How to Start a Private Investigation Business in Ohio – PISGS Class A/B/C license under ORC Chapter 4749, 2 years experience or 4-year degree, ORC § 2933.52 one-party consent recording

Key Ohio Business Resources

Resource	What It Covers
Ohio Secretary of State – Business Services	LLC formation, name searches, trade names, statutory agent
Ohio Business Central Portal	Online filing of Articles of Organization and other entity filings
Ohio Business Gateway	Vendor’s license, sales tax, employer withholding, CAT, fuel tax
Ohio Department of Taxation	Personal income tax, business income deduction, CAT, sales tax
Ohio Tax Finder	Sales tax rate lookup and municipal income tax rate lookup by address
Ohio Bureau of Workers’ Compensation (BWC)	Workers’ compensation coverage (mandatory state monopoly)
ODJFS – The SOURCE	Unemployment insurance, employer registration, quarterly reports
Ohio New Hire Reporting Center	Mandatory new hire reporting within 20 days under ORC § 3121.89
RITA (Regional Income Tax Agency)	Municipal income tax collection for 330+ Ohio cities
CCA (Central Collection Agency)	Cleveland-area municipal income tax collection
Ohio Department of Commerce – Wage and Hour	Minimum wage ($11.00/hour 2026), wage payment, prevailing wage

Frequently Asked Questions

How much does it cost to start an LLC in Ohio?

The Articles of Organization filing fee with the Ohio Secretary of State is $99 online. Ohio is one of the few states with no annual report or recurring fee for LLCs – your $99 keeps the LLC active indefinitely as long as you maintain a statutory agent. Optional costs: name reservation $39 (180 days), trade name $39 (5-year term), expedited processing $100 (same day) or $300 (1 hour). Compare to Pennsylvania ($125 + $7 annual under Act 122 of 2022), New York ($200 + biennial $9 + LLC publication requirement), or California ($70 + $800 minimum franchise tax). Ohio has one of the cheapest LLC maintenance models in the country.

What is Ohio’s income tax rate for 2026?

Ohio moved to a flat 2.75% personal income tax effective January 1, 2026, the second-lowest flat rate in the country (only Arizona’s 2.5% is lower). The 0% bracket on the first $26,050 of nonbusiness income remains; everything above $26,050 is taxed at 2.75%. Pass-through business owners (LLC members, S-corp shareholders, partners) get a $250,000 Business Income Deduction; business income above the deduction is taxed at a flat 3%. Ohio replaced its corporate income tax with the Commercial Activity Tax in 2005 – C-corps doing business in Ohio pay no separate corporate income tax, only the CAT (which most small businesses no longer owe).

Does Ohio require workers’ compensation insurance?

Yes – and you cannot buy it from a private insurer. Ohio is a monopolistic workers’ comp state, one of only four in the United States (with North Dakota, Washington, and Wyoming). All Ohio employers must purchase coverage through the state-run Bureau of Workers’ Compensation (BWC) at info.bwc.ohio.gov, with a $120 minimum opening deposit. Coverage is required for any employer with one or more employees, including part-time and family members. The BWC Board approved a 1% rate cut for private employers effective July 1, 2026 (a roughly $10 million total reduction). Penalties for operating without coverage include retroactive premium plus up to 10x the missing premium for intentional violations, plus personal liability for any workplace injury.

What is Ohio’s Commercial Activity Tax (CAT) and does it apply to my business?

The CAT is a 0.26% gross receipts tax. House Bill 33 of 2023 raised the exclusion threshold to $6 million in Ohio gross receipts effective tax year 2025 and beyond. Approximately 90% of Ohio businesses no longer owe any CAT. The Ohio Department of Taxation actively recommends canceling your CAT account if you expect $6 million or less in gross receipts. If you cross $6 million, register through the Ohio Business Gateway within 30 days, pay 0.26% on receipts above the threshold, and file quarterly returns.

Does Ohio have a general business license?

Ohio has no statewide general business license. However, if you sell taxable goods or certain services (including building cleaning, landscape services, and employment placement), you need a vendor’s license for $50 – obtained through the Ohio Business Gateway or your county auditor (the fee was raised from $25 to $50 effective April 9, 2025 under HB 366). Most cities require local business registration, and Columbus/Cleveland/Cincinnati each impose municipal income tax (2.5% / 2.5% / 1.8%). Many industries require a state professional license through agencies like OCILB (HVAC commercial), the Ohio Cosmetology and Barber Board, PISGS (private investigators), ODJFS (childcare), or the Ohio Department of Agriculture (pesticide applicators).

What is Ohio’s minimum wage in 2026?

Ohio’s 2026 minimum wage is $11.00/hour for non-tipped employees and $5.50/hour for tipped employees, effective January 1, 2026 (up 2.8% from $10.70 / $5.35 in 2025). Under Article II § 34a of the Ohio Constitution, the minimum wage adjusts each January based on the CPI-W for the 12-month period ending in August. The state minimum wage applies to businesses with annual gross receipts above $405,000 (raised from $394,000 for 2025); businesses below that threshold and 14- and 15-year-old workers are subject only to the federal minimum wage of $7.25. Ohio law preempts cities from setting their own higher minimum wage.