IMPORTANT CHANGES TO OHIO'S COMMERCIAL ACTIVITY TAX:
Ohio's Commercial Activity Tax (CAT) changed significantly effective January 1, 2024, and requires due diligence for future filing purposes. Ohio's Budget Bill (H.B. 33) eliminated the annual minimum tax for CAT taxpayers and increased the annual exclusion amount going forward. A summary of changes effective for tax periods beginning on and after January 1, 2024 are listed below:
- Annual exclusion amount increases from $1 million to $3 million for tax year 2024 and $6 million for tax year 2025
- Annual minimum tax is eliminated for 2024 and tax periods thereafter
- Annual filings are eliminated after tax year 2023; taxpayers expecting taxable gross receipts in excess of $3 million must file Ohio CAT on a quarterly basis going forward
- Taxpayers estimating less than $3 million in taxable gross receipts in 2024 are advised to cancel their CAT accounts effective December 31, 2023
- Taxpayers planning to cancel their CAT account may do so by either
- Submitting the Business Account Update Form available on the department's website or
- Through the CAT Cancel Account transaction on the Ohio Business Gateway while submitting their final annual return
- Final returns are due February 12, 2024, for quarterly taxpayers estimating $3 million or less in taxable gross receipts in 2024
- Final returns are due May 10, 2024, for annual taxpayers estimating $3 million or less in taxable gross receipts in 2024
- Combined or consolidated elected taxpayers may continue to file returns; under Ohio law, a taxpayer includes a combined taxpayer or an elective consolidated taxpayer and is treated as a single taxpayer for purposes of the exclusion
- Combined or consolidated elected taxpayers must consider the taxable gross receipts of all members of the group in determining whether the taxpayer group will exceed the exclusion amount of $3 million in 2024 and $6 million in 2025 and thereafter
The 0.26% rate on Ohio taxable gross receipts exceeding the increased annual exclusion threshold will continue to be applied. Taxpayers with any questions related to these upcoming changes as well as reviewing and/or cancelling their CAT account should contact our firm for further details and assistance.
