Big tax changes are coming at the end of the month and they'll impact your wallet; beginning September 1st, Ohio's income tax rate will drop by 9 percent.
"People will start seeing larger paychecks because their employer withholding for state income taxes are going down," said State Tax Commissioner Joe Testa.
The tax cut is also retroactive meaning that you will use the lower rate when you file your state income taxes. Testa says that means a larger refund for most filers.
At the same time income taxes are going down, the state sales tax will go up.
"It's a quarter of a percent, so it's not massive, but it is an increase," Testa said.
Essential items like groceries, health care, and housing remain exempt from sales taxes. You will see an increase when buying things like clothes, vehicles, or when you dine out.
"You would have to make a lot of really big purchases at a quarter percent to offset that 9 percent reduction in personal income tax," he said.
The use tax on purchases made online or from other states will go up by the same rate. Testa says it will be retroactive for when you file taxes next year.
The changes are part of an overall $2.7 billion tax reform package over the next three years.