You may have received a letter regarding your CAT Tax account. Beginning on January 1, 2024, the commercial activity tax (CAT) annual minimum tax is eliminated, and the exclusion amount is increased from $1 million to $3 million. Therefore, taxpayers with taxable gross receipts of $3 million or less per calendar year will no longer be subject to the CAT.
What happens now?
- Current quarterly taxpayers need to continue making payments for the remaining quarters of 2023 (November 13, 2023, and February 12, 2024). Annual filers must also still file their annual return, due May 10, 2024.
- Businesses that fall under the $3 million cutoff need to cancel their CAT accounts to prevent further correspondence. Please note: if N&Co files CAT on behalf of your business, we will handle canceling your account.
How do I cancel my account:
- *In 2024, a checkbox will be added to the 2023 annual tax return (due May 10, 2024) that taxpayers may use to cancel their CAT accounts. A checkbox will also be available on the 2023 fourth quarter tax return (due February 12, 2024) that may be used to cancel a quarterly taxpayer’s CAT account. If the taxpayer checks this box on the applicable tax return, the CAT account will be cancelled with an effective date of December 31, 2023. (*preferred method)
- Another option: If prior to 2024, visit the Gateway and file your CAT Tax final return and then select the CAT Cancel Account transaction.
- Alternatively, taxpayers may mail or fax in a Business Account Update Form to cancel their account.
What if I do not cancel my account?
- All registered CAT taxpayers with active accounts are required to file returns, even if they do not meet the taxable gross receipts threshold. If a taxpayer does not cancel their CAT account and fails to file required returns, the taxpayer may receive delinquency notices and assessments. Please note that beginning January 1, 2024, annual filing is eliminated, and all remaining taxpayers must file on a quarterly basis.
What happens going forward?
- Businesses with taxable gross receipts exceeding $3 million will be taxed at 0.26%.
- Effective January 1, 2025, the annual exclusion amount will be increased to $6 million.
Source: Ohio Department of Taxation
If you have any questions regarding your CAT or cancelling your account, please feel free to reach out to your accountant: 614-891-5423.