The Ohio Department of Revenue issued Commercial Activity Tax (CAT) Information Release 2023-1 which provides guidance to taxpayers following the enactment of House Bill 33 (HB 33).
The major change with this release is the elimination of the annual minimum tax and the elimination of annual returns for qualifying taxpayers as follows:
- Effective for tax periods beginning on and after Jan. 1, 2024, the CAT annual minimum tax is eliminated.
- For calendar year 2024, the exclusion amount is increased from $1 million to $3 million.
- For calendar year 2025 and thereafter, the exclusion amount is increased to $6 million.
- Taxpayers with $3 million or less in taxable gross receipts in 2024 and $6 million or less in 2025 will not be required to file a return with the Department of Taxation.
- The CAT rate of 0.26% remains unchanged and continues to apply to those taxpayers with taxable gross receipts over $3 million in 2024, and over $6 million in 2025 and thereafter.
- Annual filing is eliminated after the 2023 annual return, which is due May 10, 2024. Only quarterly returns may be filed for tax periods beginning on and after Jan. 1, 2024.
An annual or quarterly taxpayer that anticipates having $3 million or less in taxable gross receipts in 2024 should cancel its account effective Dec. 31, 2023, after they have filed their 2023 returns. Taxpayers can cancel their account via the Ohio Gateway or via the Business Account Update Form — additional information can be found here.
Taxpayers with more than $3 million in Ohio gross receipts will continue to have quarterly filing requirements with the first $3 million excluded from the first quarter and any unused exclusion carried forward.
Combined and consolidated taxpayers are treated as one taxpayer and must consider the taxable gross receipts of all members of their group in determining whether the group will exceed the $3 million gross receipts exclusion.