Toledo, OH Local Taxes & Fees: Business Tax Classification (2026)
Key Facts
- Business tax rate 2025-2028
- 2.25% of municipal taxable income
- Rate after 2028
- 1.50% absent new levy
- Apportionment factors
- Property, payroll, gross receipts
- Taxpayer classes
- Resident, nonresident, non-individual
- Administering office
- Tax Administrator, Div. of Taxation
- Failure-to-remit penalty
- 1st-degree misdemeanor, up to $1,000
Summary
Toledo Municipal Code § 1905.03 taxes 'a person other than an individual', corporations, partnerships, and other business entities, as a class separate from resident and nonresident individuals. Businesses apportion net profit into the City using a three-factor formula based on property, payroll, and gross receipts, at the combined 2.25% rate levied for 2025-2028 under § 1905.01(B).
(C) For a person other than an individual, the income tax levied herein shall be on all municipal taxable income, as set forth in Section 1905.02(C)(21)(a)(i). ... (F) This division applies to any taxpayer engaged in a business or profession in the Municipality, unless the taxpayer is a resident or the taxpayer is an electric company, combined company, or telephone company that is subject to and required to file reports under Chapter 5745 of the ORC. (1) Except as otherwise provided in division (F)(2) and (G) of this Section, net profit from a business or profession conducted both within and without the boundaries of the Municipality shall be considered as having a taxable situs in the Municipality for purposes of municipal income taxation in the same proportion as the average ratio of the following...
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: 2026 S-105: Complete to June 30, 2026).
Full Breakdown
03 divides income taxpayers into three classes for the City's income tax under Chapter 1905. 02(C)(21)(a)(i)', capturing corporations, partnerships, and other business entities as a distinct taxpayer class. Division (F) sets the business-specific apportionment rule: net profit from a business or profession conducted both inside and outside Toledo is apportioned to the City using a three-factor average of (1) the ratio of Toledo real and tangible personal property to property everywhere, (2) the ratio of Toledo wages and compensation to compensation paid everywhere, and (3) the ratio of Toledo gross receipts from sales, rentals, and services to gross receipts everywhere.
A taxpayer may request, or the Tax Administrator may require, an alternative apportionment method, separate accounting, excluding a factor, adding a factor, or modifying a factor, under division (F)(2) if the standard three-factor formula does not fairly reflect the business's activity in the City. 03. The Tax Administrator in the Division of Taxation administers and audits both taxpayer classes' returns.
Violations & Fines
§ 1905.99(A) makes failure to remit withheld municipal income tax a first-degree misdemeanor punishable by a fine of up to $1,000, up to six months in jail, or both. § 1905.99(D) separately bars any person, including a business taxpayer, from failing to file a return, filing a false or incomplete return, refusing to produce books and records to the Tax Administrator, or attempting to avoid payment of tax, penalties, or interest owed under Chapter 1905.
Frequently Asked Questions
How does Toledo tax a business differently from an individual?
What formula decides how much of a company's profit Toledo taxes?
What is Toledo's current business income tax rate?
What happens if a business fails to file or pay?
Sources & Official References
Other rules in Toledo
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