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Law Change to Ohio Commercial Activity Tax

What this CAT change could mean for you


Governor Mike DeWine signed 2022 H.B. 33 (law or law change) on July 4, 2023. The law change increased the Ohio Commercial Activity Tax (CAT) exclusion to $3 million in taxable gross receipts for tax periods beginning in 2024 and $6 million for tax periods beginning in 2025.

Ohio CAT Exclusion 

The new exclusion amounts apply to all business and represents a substantial increase compared to the current $150,000 sales threshold. The current threshold has been in place since 2005. After the two-year phase of the CAT exclusion in 2024 and 2025, nearly 90 percent of all businesses will no longer pay CAT – estimated to be 145,000 of the current 163,000 CAT taxpayers.

Included in the governor’s vetoes of H.B. 33 was one impacting the CAT as he struck the inflationary adjustments to those thresholds, and he vetoed the provision enabling business with over $150,000 but less than $6 million in annual gross receipts to avoid filing CAT returns.

Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett.

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