Starting Jan. 1, 2024, changes will be made to the Ohio Commercial Activity Tax (CAT), and companies with business in Ohio should understand how it may impact them.
Changes to the CAT
The following is a list of important changes, and some may require action for businesses subject to the CAT.
- The CAT annual minimum tax is eliminated
- The exclusion amount is increased from $1 million to $3 million for 2024. The exclusion amount will increase to $6 million for 2025.
- Annual filing is eliminated after the 2023 annual return, which is due May 10, 2024.
- Taxpayers with taxable gross receipts of $3 million or less per calendar year will no longer be subject to the CAT in 2024.
The Ohio Department of Taxation recommends that businesses anticipating less than $3 million in taxable gross receipts in tax year 2024, CANCEL their CAT account immediately, with an effective date of Dec. 31, 2023. A taxpayer’s CAT account may be canceled by visiting visit the Ohio Business Gateway at www.gateway.ohio.gov
New filing procedures
All registered CAT taxpayers with active accounts will be required to file returns, even if they do not meet the taxable gross receipts threshold. Therefore, it would be in your best interest to cancel your account if you are not meeting or do not intend to reach the updated threshold in 2024. If your account is not canceled, you will need to begin filing quarterly CAT returns to avoid delinquency notices and assessments beginning Jan. 1, 2024.
Preparing for the changes
If you are unsure how these changes may impact your business and your filing obligations, please fill out the form on this page to connect with a state and local tax professional.
Have a Question?
Fill out the form to speak with one of our tax professionals.