Ohio House Bill 33 recently enacted a major change in Commercial Activity Tax where nearly 90% of all Ohio-based businesses will no longer have to pay CAT, as the exemption limit is increasing. For tax periods beginning in 2024, taxable gross receipts under $3 million will be exempt from CAT. This limit will increase to $6 million in 2025. Businesses exceeding exemption amounts will still pay the existing rate of 0.26% on the excess.
To avoid having to file zero-dollar CAT returns, companies under the exemption limit can take action to cancel their accounts effective 12/31/2023 filing a final CAT return in 2023. Meet with your accountant to determine the best course of action.
Learn more from the Ohio Department of Taxation on CAT changes here.