Ohio lost 0.02% of its population to other states in fiscal 2024 as Americans sought to move to states with better tax landscapes.
A new analysis from the Tax Foundation found that the Buckeye State ranked 30th in the nation for out-migration. Ohio ranked 27th in 2023, 36th in 2022 and 37th in 2021.
Neighboring Michigan ranked 36th, losing 0.08% of its population, while Pennsylvania ranked 38th, losing 0.09%. Meanwhile, Indiana ranked 25th, gaining 0.06%, while Kentucky ranked 20th, gaining 0.16%, and West Virginia ranked 16th, gaining 0.26%.
The finding confirmed that in 2024, Americans actively relocated, with many opting for states with lower taxes. The Tax Foundation said the trend is supported by interstate migration data from the U.S. Census Bureau and commercial data from moving companies U-Haul and United Van Lines.
Nationally, South Carolina saw the largest population increase attributable to net inbound domestic migration (1.26%) for the second straight year. Other states that saw substantial growth were Idaho (0.83%), Delaware (0.79%), North Carolina (0.76%), and Tennessee (0.68%).
Conversely, liberal Hawaii lost the largest share of its population to other states (0.65%), edging out two other liberal states — New York and California, which lost 0.61% of their residents.
According to the Tax Foundation, Ohio has a graduated state individual income tax, and rates range from 2.75% to 3.5%. Additionally, some jurisdictions collect local income taxes.
The state levies a state gross receipts tax but does not have a corporate income tax. Ohio has a 5.75% state sales tax rate; its average combined state and local sales tax rate is 7.24%.
According to the Tax Foundation, the Buckeye State takes in $5,343 in state and local taxes per capita.
Separately, Ohio ranked No. 14 on the new U-Haul Growth Index.
“State-to-state transactions from the past year reaffirm customer tendencies that have been pronounced for some time,” John “J.T.” Taylor, U-Haul International president, said in a release.
“Migration to the Southeast and Southwest continues as families gauge their cost of living, job opportunities, quality of life and other factors that go into relocating to a new state,” Taylor added. “Out-migration remains prevalent for a number of markets across the Northeast, Midwest and West Coast — and particularly California.”
In fiscal 2024, Ohio General Revenue Fund tax revenues decreased by 3.4% or $971.2 million from fiscal 2023, according to a new report from the state’s Office of Budget and Management. Total fiscal 2024 GRF tax revenues were 1.7% or $484.7 million below estimates.
While personal income receipts in fiscal 2024 decreased by 11.8%, tax receipts increased by 2.6% for the non-auto sales tax and 10% for the commercial activity tax, while auto sales tax receipts decreased by 3.9%.
Ohio lawmakers have explored changes to the state’s tax framework.
In 2023, House Bill 1 would have, in part, eliminated most nonbusiness income tax brackets and instituted a marginal tax rate of 2.75% on income above $26,050. The House Ways and Means Committee did not advance the measure.
“From an economic and demographic standpoint, Ohio has not compared favorably to many other states in recent years,” Donovan O’Neil, the state director for Americans for Prosperity – Ohio, said in prepared testimony to the committee at the time. “Our state’s population growth is severely lagging that of other states, and its economic growth hasn’t kept pace with many of our regional peers,” he added.
“Restrictive tax and regulatory environments are hindrances to prosperity, innovation, and entrepreneurship,” O’Neil said. “The Ohio General Assembly has made some positive progress over the last several budget cycles by slowly and steadily driving tax rates down and reducing the number of brackets.”
Ohio did, however, expand its sales tax holiday last year, “making it longer and more inclusive,” as the Ohio Department of Taxation termed it.
