Ohio Gives Guidance on New CAT Tax Calculations– October 18, 2013 by Karen Raghanti

As reported in an earlier blog post on Ohio’s new biennial budget (H.B. 59), beginning on or after January 1, 2014, Ohio will introduce a variable minimum CAT structure. What still remained unclear was how Ohio would determine the new minimum tax amount owed.

According to CAT 2013-05 just issued by the Ohio Department of Taxation, the state will calculate the minimum CAT tax due based on the taxpayer’s previous calendar year’s taxable gross receipts. For example, if your company has annual taxable gross receipts between $150,000 and $1 million by December 31, 2013, you will owe $150 in CAT tax on your return filed in 2014. However, the chart below details how companies with greater Ohio gross receipts will be more significantly impacted under the new tiered structure.

Annual Taxable Gross Receipts Minimum CAT Tax Due*
$1 million-plus to $2 million $800
$2 million-plus to $4 million $2,100
$4 million-plus $2,600

* The minimum fee will still be due on the first quarter CAT return due in May of each year. CAT amounts listed are in addition to the 0.26% assessed on receipts over $1 million.

This new structure will phase out the benefit of the first $1 million only being subject to a minimum tax. Also, all annual filers, e.g., those with $1 million in Ohio gross receipts or less, must now pay their CAT online through the Ohio Business Gateway.

For more information, contact Karen Raghanti at kraghanti@cohencpa.com or a member of your service team.

This communication is for information only, and any action should only be taken after a detailed review of the specific situation and appropriate consultation.

Notwithstanding that these materials do not constitute legal, accounting or other professional advice, as may be required by United States Treasury Regulations and IRS Circular 230, you should be advised that these materials are not intended or written to be used, and cannot be used by you or any other person, for the purpose of avoiding penalties that may be imposed under federal tax laws. No written statement contained in these materials may be used by any person to support the promotion or marketing of or to recommend any federal tax transaction(s) or matter(s) addressed in these materials, and any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor with respect to any such federal tax transaction matter.