Ohio CAT Updates are Beneficial to All Business Owners

If you don’t know about the 2023 state law change pertaining to the Ohio Commercial Activity Tax (CAT)… keep reading! 

Since the phase in of the CAT in 2005 through 2010, there haven’t been many major updates to the structure. There has always been a $1 million exclusion although its application throughout the calendar year was adjusted in 2013. There has always been an annual minimum tax although it was tiered and increased for higher taxable gross receipts in 2014.

Ready for the major changes?

  1. There is no longer an annual minimum tax for filing periods starting 1/1/2024! This is great news for all CAT payers.

  2. The exclusion amounts have been increased for 2024 and 2025. Beginning 1/1/2024, the annual CAT exclusion will be $3 million. Beginning 1/1/2025, the annual CAT exclusion will be $6 million. This is a benefit for all taxpayers!

  3. There are no longer CAT filing requirements for taxpayers with taxable gross receipts that are less than the annual exclusion amounts! In other words, close your CAT account if you are not going to have $3 million of taxable gross receipts in 2024. And close your CAT account next year if you are not going to have over $6 million of taxable gross receipts in 2025 (Remember, these are OHIO taxable receipts!).

  4. This might be obvious with the news above but there are no longer annual filers - only quarterly filers (in the past, filers with over $1 million of gross receipts) going forward!

How do you close a CAT account? There are multiple options. You can toggle buttons within your Ohio Business Gateway CAT account to close the account or you can fill out an Ohio Department of Taxation Business Account Update Form and email/fax/mail it to the Ohio Department of Taxation. Remember to put the right effective closure date on your form!

Please contact our team if you have any questions!

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