What is the Ohio CAT and how do I close my account, if the new rules apply to my business?
In 2023, Ohio announced major changes to the Ohio Commercial Activity Tax (CAT) filing requirement. Historically, any business with $150,000 or more in gross income was required to register and pay this additional tax. The Ohio tax department has made major changes only requiring larger businesses to file and pay. Here is the public announcement email from the Ohio Department of Taxation with more information:
Beginning Jan. 1, 2024, please be aware of the following changes to the Commercial Activity Tax (CAT).
The CAT annual minimum tax is eliminated
The exclusion amount is increased from $1 million to $3 million.
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.
If you anticipate continuing to have less than $3 million in taxable gross receipts in tax year 2024, we recommend that you cancel your CAT account immediately with an effective date of Dec. 31, 2023.
*Please note, you must still file your last annual return for tax year 2023 which is due May 10, 2024.
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Here are steps to close your account if your gross income is expected to be less than $3 million in 2024. Closing the account NOW and making it effective 12/31/2023 will save you time and hassle later!
Go to your Ohio Business Gateway (OBG) account and follow the following screenshots. If you don’t complete this before 12/31/2023, you may not be able to do it online. If you do not see the “CAT CANCEL ACCOUNT” option, refer to this FAQ to add that to your OBG home page.
If you have additional questions or issues closing the CAT account, please contact the Ohio CAT department.