Changes Coming to Ohio Commercial Activity Tax
If you pay the Ohio Commercial Activity Tax (CAT) you know how simplistic it is. Determine your Ohio gross receipts, pay the minimum tax and if your receipts exceed $1,000,000 the tax is 0.26% on the excess. Regardless of how simple the tax is or how little you might have paid, it’s still an administrative burden to track and remember to file. Good news is coming for 2024. Starting next year if Ohio gross receipts are $3,000,000 or less the tax will be $0. There will also be no minimum tax and it will solely be 0.26% multiplied by gross receipts over $3,000,00. That is scheduled to last for one year and in 2025 the threshold goes up to $6,000,000. 2023 will also be the last year that an annual CAT return can be filed for those eligible and those required to file going forward will be quarterly.
If you know your Ohio gross receipts will be under $3,000,000 in 2024 and going forward you can cancel your CAT account up to a year in advance. Below is a helpful table to make sense of this change.
Source: Ohio Department of Taxation
Nathan is a CPA and has more than ten years of experience providing tax planning, consulting and compliance services to a number of privately held businesses and individuals in a variety of industries, with a special focus on the transportation and logistics industry. He actively communicates with clients and seeks ways to align their individual and business goals with available tax strategies to allow them to make well-informed decisions.
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