Major Changes to Ohio Commercial Activity Tax

Date September 5, 2023
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The Ohio Department of Taxation recently issued an information release on developments to the state’s commercial activities tax (CAT). The recent legislation impacting the CAT is favorable to small businesses as the CAT filing requirements and thresholds have been changed for tax periods commencing on or after January 1, 2024. The most significant changes for Ohio CAT taxpayers include:

  • The CAT annual minimum tax is eliminated for periods on or after January 1, 2024.
  • The CAT exclusion amount is increased to $3 million for calendar year 2024 and $6 million for calendar years 2025 and beyond.
  • Beginning with tax year 2024, taxpayers with calendar year taxable gross receipts less than the annual exclusion amount will not be required to file a return.
  • Annual filing is no longer required after the 2023 annual return.
  • For tax periods, on or after January 1, 2024, only quarterly CAT returns will be filed.

Taxpayers that anticipate having less than $3 million in taxable gross receipts for 2024 should evaluate cancelling their CAT accounts. If a taxpayer anticipates less than $3 million in taxable gross receipts in 2024, they can cancel their CAT account effective December 31, 2023. Taxpayers cancelling their CAT accounts should ensure their final annual or quarterly returns are filed. The due dates for these final returns will fall after the effective date of their account cancellations.

The information release from the Department includes guidance on group taxpayers and how to cancel a CAT account. There is a chart by tax year with the filing thresholds, exclusions, and annual minimum tax amounts.

If you have questions on Ohio’s CAT or other SALT matters, please contact HBK’s SALT Advisory Group at hbksalt@hbkcpa.com.

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