Changes Coming to Ohio’s Commercial Activity Tax… Are You Ready?

If you’re a Commercial Activity Tax (CAT) taxpayer, then listen up! Thanks to the recent approval of the new biennial budget, significant changes are coming to Ohio’s CAT.

Beginning Jan. 1, 2014, changes to the annual minimum tax will go into effect. While taxpayers with receipts of $1 million or less will see no increase in their CAT liabilities, if you have taxable gross receipts in excess of $1 million, you will see an increase in your annual minimum tax amount. The increase is as follows:

  • Receipts totaling more than $1 million and up to $2 million: New annual tax is $800
  • Receipts totaling more than $2 million and up to $4 million: New annual tax is $2,100
  • Receipts totaling more than $4 million: New annual tax is $2,600

The CAT rate of 0.26 percent on receipts totaling more than $1 million remains unchanged.

Motor Fuel Receipts Tax to Replace CAT

The Motor Fuel Receipts Tax (MFRT) has been created to replace the CAT tax on the sale of motor fuels. Beginning July 1, 2014, all motor fuel is excluded from the CAT base. Instead, receipts from the first sale of motor fuel in Ohio will be reported by refineries and terminals under the new Motor Fuel Receipts Tax. Gas stations will continue to file CAT returns reflecting business activities other than the sales of motor fuels (candy, beverages, etc.).

Electronic Filing and Payment

In addition to the CAT changes and the new MFRT, the Ohio Department of Taxation intends to have all annual CAT taxpayers file and pay electronically by using the Ohio Business Gateway for tax periods beginning on Jan. 1, 2014. While this mandate is not finalized, you have until August 2, 2013, to comment on this amendment. For more information or to find out how you can submit a comment, click here.

This article was originally published in Illuminations: Facts & Figures from people with a brighter way, a Rea & Associates enewsletter, 7/31/2013.

Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.