Important Changes Coming to the Ohio Commercial Activity Tax
Beginning on January 1, 2024, the Commercial Activity Tax (CAT) will undergo major changes. For tax periods beginning on and after January 1, 2024, the CAT annual minimum tax is eliminated, and the exclusion amount is increased from $1 million to $3 million.
Therefore, taxpayers with taxable gross receipts of $3 million or less per calendar year will no longer be subject to the CAT.
Act Now! – No need to wait until 2024 to cancel your CAT account! Both annual and quarterly taxpayers who anticipate having less than $3 million in taxable gross receipts in tax year 2024 may cancel their CAT account immediately with an effective date of December 31, 2023.
Summary of Changes
CAT Changes Effective January 1, 2024
- The annual minimum tax is eliminated, for tax periods 2024 and thereafter.
- The annual exclusion amount is increased to $3 million.
- Taxpayers with taxable gross receipts of $3 million or less per calendar year will no longer be subject to the CAT.
- The 2023 annual return due May 10, 2024, is the final return required for annual filers.
- Annual taxpayers will need to cancel their CAT accounts when filing their final 2023 returns. Taxpayers should use an effective date of December 31, 2023.
- Quarterly taxpayers that anticipate $3 million or less in taxable gross receipts in 2024 should file their final returns, due February 12, 2024, and cancel their CAT accounts with an effective date of December 31, 2023.
- Taxable gross receipts exceeding $3 million will be taxed at 0.26%
CAT Changes Effective January 1, 2025
- The annual exclusion amount is increased to $6 million.
- Taxpayers with taxable gross receipts of $6 million or less per calendar year will no longer be subject to the CAT.
- Quarterly taxpayers that anticipate $6 million or less in taxable gross receipts in 2025 should file their final returns, due February 10, 2025, and cancel their CAT accounts with an effective date of December 31, 2024.
- Taxable gross receipts exceeding $6 million will be taxed at 0.26%.
