Ohio implements commercial activity tax

COLUMBUS, Ohio — The state of Ohio has introduced a new tax for commercial activity.

The Commercial Activity Tax, as it’s been named, is a broad-based tax on a businesses’ (both domestic and out-of-state) gross receipts.

The amount of taxable gross receipts determines whether or how the CAT applies, says the Ohio Dept. of taxation. Businesses with annual gross receipts of $150,000 or less are not subject to the CAT; those with receipts from $150,001 to $1,000,000 pay a minimum $150 tax; receipts exceeding one million dollars — when the tax is fully phased in – will be taxed at a rate of 0.26 percent when its fully phased next year. However, the tax rate for the first tax period from July 1, 2005 to December 31, 2005 is only 0.06 percent).

The first CAT returns must be filed by Feb. 10, 2006.

Businesses subject to the CAT must register by Nov. 15, 2005. Registration includes a one-time refundable fee of $15 for registering on-line or a $20 fee for paper registration. On-line registration is available at the Ohio Business Gateway (obg.ohio.gov); paper applications will be available on the ODT web site (tax.ohio.gov).