As Ohio moves forward with its regulated cannabis market, both consumers and dispensary operators are paying close attention to how Ohio cannabis sales taxes will impact prices and business operations. While the Ohio state sales tax applies to many retail purchases, cannabis products have their own tax structure that combines state and local rates. Understanding how these taxes work is essential for anyone buying or selling cannabis in the state.
Ohio Sales Tax Overview
The base Ohio state sales tax rate is 5.75%, which applies to most taxable goods and services. However, cities and counties in Ohio can add local sales taxes on top of the state rate, leading to variations across the state. For example:
- Akron Ohio sales tax: Typically around 6.75% when local taxes are added.
- Columbus Ohio sales tax rate: Generally 7.5% including local rates.
- Ohio sales tax Cincinnati: About 7.8% depending on Hamilton County’s local tax.
These differences mean the total sale tax Ohio residents pay can vary significantly depending on where the purchase is made.
Ohio Cannabis Tax Structure
Cannabis products in Ohio are subject to both the Ohio sales tax and additional excise taxes specifically for marijuana. The state has implemented a 10% excise tax on adult-use cannabis sales, which is charged on top of the standard sales tax. This means the final price at the register for cannabis can be considerably higher than the sticker price.
For example, if you purchase $100 worth of cannabis in Columbus:
- 10% cannabis excise tax = $10
- 7.5% Columbus Ohio sales tax rate = $7.50
- Total cost = $117.50
Cannabis vs. Food Sales Tax in Ohio
One common point of confusion is the difference between cannabis sales taxes and food sales tax Ohio rules. In Ohio, many grocery food items are exempt from state sales tax, but cannabis edibles are not considered a “food” under tax law. This means that even though they are consumed, edibles are taxed at the full Ohio sale tax rate plus the cannabis excise tax.
Local Impact of Cannabis Taxes
The introduction of legal cannabis sales is expected to generate millions in new tax revenue for Ohio’s cities and counties. Dispensaries in places like Akron, Columbus, and Cincinnati will see different effective tax rates due to local add-ons. For consumers, it’s worth checking the combined Ohio sales tax rate in your city to estimate the total cost before purchasing.
Key Takeaways
- Ohio state sales tax rate: 5.75% statewide, with additional local rates.
- Cannabis excise tax: 10% applied to all adult-use marijuana sales.
- Local rates vary: Akron Ohio sales tax ≈ 6.75%, Columbus Ohio sales tax rate ≈ 7.5%, Ohio sales tax Cincinnati ≈ 7.8%.
- Cannabis edibles are taxed differently than grocery food under food sales tax Ohio rules.
- Combined taxes make cannabis purchases more expensive than most retail goods in the state.
As Ohio’s cannabis market develops, keeping track of both the Ohio sales tax and the cannabis-specific excise tax will help consumers budget accurately and businesses plan their pricing strategies.
If you’re opening a dispensary or already operating in Ohio’s cannabis market and want to stay ahead of sales tax and excise rules, contact Dimov Tax to review your numbers, set up compliant systems, and protect your margins.