The Ohio Quarterly CAT Return filing deadline is Monday, November 10, 2014.
The commercial activity tax (CAT) is an annual tax imposed on Ohio business entities and certain out of state businesses for the privilege of doing business in Ohio. It is measured by taxable gross receipts from business activities in Ohio. Businesses with Ohio taxable gross receipts of $150,000 or more per calendar year must register for the CAT, file all applicable returns and make all corresponding payments. CAT applies to all types of businesses such as, but not limited to, retailers, service providers and manufacturers. Certain receipts are not taxable receipts, such as interest, dividends, capital gains, wages reported on a W-2, or gifts.
Annual CAT taxpayers are those taxpayers with taxable gross receipts between $150,000 and $1,000,000.
Taxpayers with annual taxable gross receipts in excess of $1,000,000 must file and pay returns on a quarterly basis. Quarterly returns are required to be filed electronically through the Ohio Business Gateway. Alternatively, annual taxpayers may use Telefile beginning in April 2014. Although the Ohio Revised Code section 5751.07 requires that all CAT filers remit each tax payment and corresponding return electronically, taxpayers may apply to the tax commissioner, on the CAT FBP, to be excused from that requirement for a good cause.
All CAT taxpayers pay an AMT (annual minimum tax) which is due with calendar year taxpayers’ annual returns and with quarterly taxpayers’ first quarter returns, due on or before May 10th of each year. For tax periods beginning on January 1, 2014 and thereafter, the AMT will become a tiered structure, and taxpayers will pay an amount that corresponds with their overall commercial activity. The taxpayer will utilize its previous calendar year’s taxable gross receipts to determine the current year’s AMT. Those taxpayers with $1 million or less in taxable gross receipts will pay $150 AMT (no change). The AMT for taxpayers with total taxable gross receipts of more than $1 million but less than or equal to $2 million will be $800; AMT for taxpayers with taxable gross receipts more than $2 million but less than or equal to $4 million, $2,100; and AMT for taxpayers with taxable gross receipts in excess of $4 million, $2,600.
Visit the Ohio Department of Taxation’s website for examples.
Quarterly taxpayers shall apply the full $1,000,000 exclusion amount to the first quarter return for that calendar year and may carry forward and apply any unused exclusion amount to subsequent calendar quarters within the same calendar year. Any unused exclusion amount from the calendar may not be carried forward into the next calendar year.
Taxpayers who are not registered for the CAT must register first before filing any return.
Contact Levin Swedler Kennedy – Certified Public Accountants with any questions regarding Ohio CAT compliance.
Written by: Shelley Krakauer, MSA