If you want to start and run an Ohio limited liability company (LLC), you'll need to prepare and file various documents with the state. This article covers the most important ongoing reporting and state tax filing requirements for Ohio LLCs.
Unlike most states, Ohio doesn't require LLCs to file annual reports.
When it comes to income taxes, most LLCs are considered pass-through tax entities. In other words, the responsibility for paying federal income taxes passes through the LLC itself and falls on the individual LLC members. By default, LLCs themselves don't pay federal income taxes, only their members do.
Might pay commercial activity tax (CAT). Ohio imposes an annual privilege tax on businesses with more than $150,000 in taxable gross receipts. This tax is also known as a "franchise tax." If you qualify for this tax, you'll need to register your business with the Ohio Department of Taxation (DOT). Your LLC's gross receipts total will determine how much you owe and whether you file monthly or annually. (Read more about the CAT on the DOT website.)
Pass through entity tax election. As noted above, an LLC is taxed as a pass-through entity and the owners, not the LLC, pay taxes on the LLC's income. But starting in the tax year 2022, multi-member LLCs and other pass-through entities can choose to have their income taxed at the entity level instead of at the individual level. File form IT 4738 with the DOT to make the election.
Electing corporate tax status. Your LLC can choose to be taxed as a corporation. Ohio doesn't have a corporate income tax. But your corporation would still be responsible for paying the CAT if liable.
You can find more details in our article about Ohio business income tax. Ohio's tax laws and requirements can be confusing. If you have questions about your tax obligations, consider speaking with a business or tax attorney.
If your business has employees, then you'll be responsible for additional taxes as an employer. As an employer, you have obligations to the federal government and the state governments.
Withholding employee wages. You'll need to withhold and pay employee income taxes to the DOT. Begin by registering your business with the DOT online through the Ohio Business Gateway. Once you've registered, you'll need to file withholding taxes on a periodic basis (for example, monthly, quarterly, or partial-weekly) typically using Form IT-501. You'll also need to use Form IT 941 each year to reconcile your LLC's tax withholding. The DOT provides helpful resources, including tax filing guidelines and due dates, on its employer withholding webpage.
Unemployment insurance (UI) tax. In addition, you'll probably need to register to pay the state UI tax. The Ohio Department of Job and Family Services (ODJFS) handles this tax. You can register for these taxes online through the SOURCE or on paper using Form JFS-20100. Then, on a quarterly basis, you'll need to file wage reports with the ODJFS. For more information, see the UI tax for new employers section of the ODJFS website.
You must register with the DOT to obtain a vendor's license. You can apply for a license either online through the Ohio Business Gateway or with your county auditor. Then, on a periodic basis—either monthly, quarterly, or semiannually—you must file a sales tax return through the Business Gateway. Use Form UST-1 for sales tax and Form UUT-1 for use tax.
In addition to state sales and use tax, you might be responsible for reporting and paying sales and use tax to your city or county. Make sure you check with your local taxing authorities for your reporting responsibilities.
For more information, check the sales and use tax section of the DOT website.
If you formed your LLC in Ohio, but plan to do business in other states, you might need to register as an out-of-state business with those states. For example, many states require you to register as a foreign (out-of-state) business, if you have a business location (office, store, or warehouse) in the state or if you have employees or representatives in the state.
To find out more about the foreign registration process, see our state guide to qualifying to do business outside your state.