Ohio CAT Exclusion Increases January 1, 2025
The Ohio Department of Taxation reminds taxpayers that the annual exclusion amount for the Commercial Activity Tax (CAT) is increasing to $6 million effective January 1, 2025. Taxpayers with $6 million or less in calendar year taxable gross receipts are no longer subject to the CAT. Taxpayers that expect to be under the $6 million exclusion in 2025 can cancel their CAT accounts, however; a final return is required. CAT accounts may be cancelled via the Ohio Business Gateway or by submitting a Business Account Update Form (BA-UF).
Thank you for reading this post, don't forget to subscribe!The CAT changes result from the Ohio Biennial Budget Bill which was signed into law on July 4, 2023. The legislation made significant changes to the CAT in terms of exclusions based on taxable gross receipts. Starting from 2024, all taxable gross receipts of $3 million or less are exempt from the CAT. The exemption increases to $6 million or less for tax periods beginning in 2025. Amounts exceeding these thresholds will still be subject to the existing tax rate of 0.26%.
For more information on the CAT and recent changes please visit the Department webpage.
If you have questions about Ohio’s Commercial Activity Tax, please contact HBK’s SALT Advisory group at hbksalt@hbkcpa.com.
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