5 New Ohio Laws Taking Effect on January 1st

OHIO - As the calendar turns to 2026, Ohioans are seeing a significant shift in state policy. From a boost in the minimum wage to a historic overhaul of the State tax system, these updates will impact your paycheck, your property taxes, and your household budget.

Here are the five biggest new Ohio laws and policy shifts taking effect on January 1.

---

1. The Minimum Wage Increase

Following the 2006 Constitutional Amendment that ties wages to inflation, Ohio's minimum wage is set to receive its annual bump.

• The Change: The minimum wage for non-tipped employees will increase to $11.00 per hour (up from $10.70). For tipped employees, the base rate will rise to $5.50 per hour.
• The Threshold: This higher state rate applies to businesses with annual gross receipts exceeding $405,000. Smaller companies and workers aged 14 and 15 will continue to be subject to the federal minimum wage of $7.25 per hour.

2. The State Income Tax "Flattening."

In one of the most significant tax reforms in decades, Ohio is officially moving toward a simplified, flat-rate income tax system for the 2026 tax year.

• The Rate: Most Ohioans will now pay a flat 2.75% on non-business income above $26,050. This replaces the old multi-bracket system and is designed to simplify filing for millions of taxpayers.
• The Impact: This reduction is projected to save taxpayers more than $1 billion over the next two years. Those earning $26,050 or less remain exempt from state income tax.

3. Enhanced Property Tax Relief for Disabled Veterans

A significant win for Ohio's veteran community takes effect this January. New provisions under SB 1749 provide substantial relief to those who served.

• The Benefit: Veterans with a 100% service-connected disability rating from the VA will now be fully exempt from property taxes on their primary residence.
• Expanded Eligibility: The law also removes previous income and home-value caps that once limited this benefit. Surviving spouses can continue to claim the exemption as long as they do not remarry and the home remains their primary residence.

4. Repeal of Specific Sales Tax Exemptions

While income taxes are declining, some sales tax exemptions are disappearing to help balance the state budget.

• Starting January 1, sales tax will be applied to motor vehicle rentals provided as "loaners" while your car is being serviced (if reimbursed by a manufacturer or warrantor).
• Other Repeals: Exemptions have also been removed for refrigerated food vending machines, digital audio or jukeboxes in commercial establishments, and certain telecommunications services used by call centers.

5. New Marijuana & "Intoxicating Hemp" Restrictions

Following the signing of Senate Bill 56, the legal landscape for cannabis and hemp is tightening on New Year's Day.

• Safety & Packaging: It is now a state crime to store marijuana edibles outside of their original packaging. Additionally, the law reduces the allowable THC levels in adult-use extracts from 90% down to 70%.
• The Hemp Crackdown: The law begins a 90-day countdown to end the sale of unregulated "intoxicating hemp" products (like Delta-8) in gas stations and convenience stores. By spring, these products must be sold exclusively through licensed dispensaries.

---

How to Prepare

• For Employees: Check your first January paycheck to ensure your employer has updated withholding tables to reflect the new 2.75% flat tax.
• For Veterans: If you have a 100% disability rating, contact your County Auditor this January to ensure your property tax exemption is applied for the upcoming year.
• For Business Owners: Ensure you display the official 2026 Minimum Wage poster in your workplace to remain compliant with state law.

  ---

  Share This Article on Social Media

  • Share
  • Tweet
  • Pin

  ---

Ohio State