The Ohio Commercial Activity Tax (CAT) will undergo major changes beginning January 1, 2024. For tax periods beginning on and after January 1, 2024, the CAT annual minimum tax is eliminated. 

For calendar year 2024, the exclusion amount is increased from $1 million to $3 million. For calendar year 2025 and thereafter, the exclusion amount is increased to $6 million. Taxpayers with $3 million or less in taxable gross receipts in 2024, and $6 million or less in 2025 will not be required to file a return with the Department of Taxation. 

The CAT rate of 0.26% remains unchanged and continues to apply to gross receipts over $3 million in 2024, and over $6 million in 2025 and thereafter. 

An annual taxpayer with $1 million or less in taxable gross receipts during 2023 and anticipating having $3 million or less in taxable gross receipts during 2024 will file a final annual return to report taxable gross receipts for 2023. An annual taxpayer that anticipates having $3 million or less in taxable gross receipts in 2024 should cancel its account effective December 31, 2023. It is important that an annual taxpayer that cancels its CAT account must file its final return due May 10, 2024. After the 2023 annual CAT returns are filed, annual filing is eliminated. All remaining CAT taxpayers must file quarterly for periods on or after January 1, 2024.

Alternatively, any quarterly taxpayer that anticipates having $3 million or less in taxable gross receipts during 2024 should cancel its CAT account effective December 31, 2023. The final CAT return for a quarterly taxpayer is the 2023 fourth quarter return due February 12, 2024. If such taxpayer exceeds the exclusion amount in a subsequent calendar year, the taxpayer must reactivate its CAT account and resume filing and paying the CAT at that time.

While these changes may relieve filings and payments of the Ohio CAT, many additional states impose similar types of taxes. RubinBrown State and Local Tax (SALT) professionals can help answer your questions or evaluate the impact these and other taxes may have on your business. Please contact one of the SALT professionals or your primary RubinBrown contact for assistance. 

Published: 11/28/2023

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