How to Start a Small Business in Ohio: Steps, Fees and Taxes (2026)

Admin

4 days ago

A plain-English checklist of the filings, fees and taxes for starting a small business in Ohio.

Quick answer: To start a small business in Ohio, choose a structure, file with the Ohio Secretary of State, get an EIN, and register for the taxes that apply. An Ohio LLC costs $99 to form and has no annual report. If you sell taxable goods, you generally need a vendor’s license, which costs $50. Most small businesses fall below the $6 million commercial activity tax exclusion.

Ohio is a relatively simple state to start in. Forming an LLC is inexpensive, and there is no annual report for ordinary LLCs. A big change came in 2025 too, when the commercial activity tax exclusion rose to $6 million, taking most small firms out of that tax altogether.

There are some Ohio-specific rules to watch, however, including local city income taxes and a state-run workers’ compensation system. This guide takes you through each step. The fees below were correct when we checked, but always confirm them with the state before you file.

What does it cost to start a business in Ohio?

Item	Cost	Who needs it
LLC Articles of Organization	$99	Anyone forming an Ohio LLC
Trade name registration	$39, valid for 5 years	Businesses using a name other than their legal name
Vendor’s license	$50	Sellers of taxable goods or services at a fixed Ohio location
Transient vendor’s license	$50	Sellers at shows, flea markets and other temporary locations
LLC annual report	None	Ordinary Ohio LLCs do not file one
EIN	Free	Most LLCs and all businesses with employees

Local permits, insurance and professional licenses are extra, and they vary by trade and by city.

What are the steps to start a small business in Ohio?

1. Choose your business structure

Sole proprietorship: It is simple and cheap, but your personal assets are not separate from the business.
LLC: It offers liability protection for a $99 filing fee. Many small owners find it a good balance.
Corporation: It is more complex, and it is more common when you plan to raise money from investors.

2. Choose and register a name

Search the Ohio Secretary of State’s business records to check that your name is available. If you plan to trade under a different name, file a trade name registration with the Secretary of State.

3. File with the Secretary of State

LLCs file Articles of Organization (Form 533A) through the state’s Ohio Business Central portal. You must also name a statutory agent, a person or company with an Ohio address who accepts legal papers for the business. Keep those details up to date, as there is no annual report to prompt you.

Example
Marcus opens a small lawn care business in Dayton. He files his LLC online for $99 and names himself as the statutory agent, as he lives in Ohio. He registers the trade name “Gem City Lawns” for $39, then he gets a free EIN from the IRS the same day.

4. Get your EIN

Apply for an Employer Identification Number through the IRS website. It is free, and our guide on how to get an EIN explains the process step by step.

5. Register for Ohio taxes

Use OH|TAX eServices or the Ohio Business Gateway to register for the taxes that apply to you. If you sell taxable goods or services, you will generally need a vendor’s license before your first sale. Each fixed location needs its own license.

6. Check local rules and licenses

Many professions need a state license, and cities may require permits and zoning approval. Check with your city or county before you sign a lease or begin working from home.

7. Set up your employer accounts if you hire

Ohio has its own requirements for employers. See the employer section below before you pay your first wages.

8. Open a bank account and get insured

Keep business and personal money apart, particularly if you have formed an LLC. Then ask an insurance agent which cover your trade needs.

BTS Magazine Tip
Ohio LLCs do not file annual reports, so nothing reminds you if your statutory agent details go out of date. Set a yearly calendar reminder to check your record. A missed legal notice could turn into a much bigger problem.

What taxes do Ohio small businesses pay?

Sales tax: The state rate is 5.75 percent. Counties and transit authorities can add local tax, and the combined rate cannot exceed 8.75 percent. You must generally file returns even when no tax is due.
Commercial activity tax (CAT): This is a 0.26 percent tax on Ohio taxable gross receipts. For 2025 and later, businesses with $6 million or less in taxable sales are excluded.
Income tax: Sole proprietors and most LLC owners report profits on their personal returns. Ohio has its own personal income tax rules for business income, so ask an adviser how they apply to you.
Municipal income tax: Many Ohio cities tax income earned inside the city, and many also tax income earned by their residents. This catches out many newcomers, so check with your city tax office.
Federal taxes: You may owe self-employment tax, and you may need to make quarterly estimated payments.

Example
Lena sells handmade candles from a small Columbus shop. She needs a vendor’s license and must collect sales tax at the local combined rate. Her sales are far below $6 million, so the CAT does not apply. Her city’s income tax still does, so she adds that to her monthly tax savings.

If you sell at craft fairs and markets in different counties, the transient vendor’s license is usually the better fit, because it is valid across the state.

What do you need to do when you hire?

Employer withholding: Register within 15 days of when your withholding duty begins, using OH|TAX eServices. How often you file depends on how much you withhold.
School district tax: Some employees live in a district with an income tax, so you may need to withhold for that too.
Workers’ compensation: Ohio requires employers to maintain cover, and most private employers obtain it through the state-run Bureau of Workers’ Compensation.
Unemployment compensation: Register with the state as required.
Year-end filings: Annual withholding reconciliations and W-2 forms are due by January 31 of the following year.

If you’re not sure whether someone is an employee or a contractor, get advice before you pay them. Getting this wrong can lead to back taxes and penalties.

What are the benefits and limits of starting in Ohio?

Low formation cost: At $99 with no annual report, an Ohio LLC is simple to set up and keep running.
CAT relief for small firms: Most small businesses no longer pay this tax.
Multiple tax layers: You may deal with state, county, city and school district taxes, which can take time to get right.
Fees can change: The vendor’s license doubled in 2025, so confirm all costs before you file.

This guide is general information, not legal or tax advice. A local accountant can check your exact situation, and it is usually a modest cost compared with fixing mistakes later.

Try this today
Look up your city’s income tax rules, and check whether your business needs a local permit. Then search the Ohio Secretary of State’s business records to see if your favourite business name is still available.

Frequently asked questions

How much does it cost to start a business in Ohio?

You can start as a sole proprietor for very little. An LLC costs $99 to form. Add $39 for a trade name and $50 for a vendor’s license if you need them.

Do I need an LLC to start a business in Ohio?

No. Sole proprietorships are allowed. An LLC is optional, but it can help to protect your personal assets from business debts.

Does Ohio require an annual report for LLCs?

Ordinary Ohio LLCs do not file an annual report. You must still keep your statutory agent information up to date.

Do I need a vendor’s license in Ohio?

You generally need one if you sell taxable goods or services. It costs $50 for vendors and transient vendors, and you can get it through OH|TAX eServices or your county auditor.

Do small businesses pay the commercial activity tax?

Not if they have $6 million or less in taxable gross receipts, for 2025 and later. If you have an active CAT account, keep filing until you cancel it.

Can I run a small business from home in Ohio?

Often, yes, but check your local zoning rules and any lease or homeowners association limits, especially if customers will visit.

Final Thoughts

An Ohio LLC costs $99, and ordinary LLCs have no annual report.
Get a vendor’s license before you start selling taxable goods.
Most small businesses can ignore the CAT, but do not forget about local income taxes.
Ohio employers have specific duties, including workers’ compensation cover.