08/23/2023

Changes to CAT Tax are Upcoming

These changes may require your attention

There are upcoming changes to the Commercial Activity Tax (CAT) program that may require your attention. Starting in 2024, only businesses with taxable gross receipts exceeding $3 million will be required to remit CAT tax. Beginning in 2025, the gross receipts threshold is raised again to $6 million.

The CAT rate of .26 percent will not change.

The Ohio Department of Taxation has indicated most taxpayers should cancel their CAT accounts unless they are close to or over the new thresholds. If the business' gross receipts are less than $3 million, a final return should be filed in 2024 and the account cancelled effective Dec. 31, 2023. For annual filers, the final return will be due May 10, 2024. For quarterly filers, the final return will be due Feb. 10, 2024.

Any accounts that are over $3 million, but under $6 million will need to file quarterly CAT returns throughout 2024, but then may cancel their account effective Dec. 31, 2024 and file a final return by Feb. 10, 2025.

If your gross receipts are close to the $3 million or $6 million thresholds, Oles & Associates can assist you with determining whether you should cancel your accounts and when to do so.

According to Oles & Associates, this is a major improvement on the current CAT system and should help alleviate a lot of paperwork and financial burden from businesses. If you have questions or would like additional guidance and assistance, please contact Oles + Associates.