oh-cat-tax

Ohio Commercial Activity Tax (CAT) Skill — Self-Employed / Sole Proprietor

Scope. Ohio Commercial Activity Tax for sole proprietors and businesses with Ohio taxable gross receipts potentially exceeding the filing threshold. Covers the CAT as reformed by Am. Sub. HB 33 (2023), effective for tax periods beginning January 1, 2024 and after. Quality tier. Q3 — AI-drafted, not independently verified. All rates and thresholds have been researched from primary sources but must be confirmed by a qualified professional before use.

Section 1: Metadata

• Tax year covered — 2025 and after
• Primary form — CAT Annual/Quarterly Return (filed via Ohio Business Gateway)
• Tax authority — Ohio Department of Taxation
• Tax type — Gross receipts tax
• Filing threshold — Taxable gross receipts (TGR) > $6,000,000 (2025+)
• Currency date — May 2026
• https://codes.ohio.gov/ohio-revised-code/chapter-5751 — https://codes.ohio.gov/ohio-revised-code/chapter-5751 (Ohio Revised Code § 5751 (CAT statute))
• https://dam.assets.ohio.gov/image/upload/tax.ohio.gov/commercial_activities/information_releases/CAT_2023-01_info_release.pdf — https://dam.assets.ohio.gov/image/upload/tax.ohio.gov/commercial_activities/information_releases/CAT_2023-01_info_release.pdf (Ohio Information Release CAT 2023-01)
• https://tax.ohio.gov/business/ohio-business-taxes/commercial-activities/changes_to_ohios_commercial_activity_tax — https://tax.ohio.gov/business/ohio-business-taxes/commercial-activities/changes_to_ohios_commercial_activity_tax (Ohio CAT Changes Page)
• https://www.legislature.ohio.gov/legislation/135/hb33 — https://www.legislature.ohio.gov/legislation/135/hb33 (Am. Sub. HB 33, 135th General Assembly)

Section 1: Metadata table

Field	Value
Tax year covered	2025 and after
Primary form	CAT Annual/Quarterly Return (filed via Ohio Business Gateway)
Tax authority	Ohio Department of Taxation
Tax type	Gross receipts tax
Filing threshold	Taxable gross receipts (TGR) > $6,000,000 (2025+)
Currency date	May 2026

Primary sources

Source	URL
Ohio Revised Code § 5751 (CAT statute)	https://codes.ohio.gov/ohio-revised-code/chapter-5751
Ohio Information Release CAT 2023-01	https://dam.assets.ohio.gov/image/upload/tax.ohio.gov/commercial_activities/information_releases/CAT_2023-01_info_release.pdf
Ohio CAT Changes Page	https://tax.ohio.gov/business/ohio-business-taxes/commercial-activities/changes_to_ohios_commercial_activity_tax
Am. Sub. HB 33, 135th General Assembly	https://www.legislature.ohio.gov/legislation/135/hb33

Section 2: Quick reference — rates and thresholds

CAT rate and exclusion by year

CAT rate and exclusion by year

Calendar year	Exclusion amount	Annual minimum tax	Tax rate on TGR above exclusion	Filing required?
Pre-2024	$1,000,000	$150 – $2,600 (tiered)	0.26%	TGR > $150,000
2024	$3,000,000	Eliminated	0.26%	TGR > $3,000,000
2025 and after	$6,000,000	Eliminated	0.26%	TGR > $6,000,000

What this means for most sole proprietors

The vast majority of sole proprietors will not owe any CAT starting in 2025. Only businesses with more than $6 million in Ohio taxable gross receipts are subject to the tax. A typical sole proprietor or freelancer with annual revenue well under $6 million has no CAT obligation.

CAT computation formula (2025+)

• CAT computation formula (2025+) — If Ohio TGR ≤ $6,000,000: CAT = $0 (no filing required) If Ohio TGR > $6,000,000: CAT = 0.26% × (Ohio TGR − $6,000,000) (Section 2: Quick reference — rates and thresholds)

Section 3: Key concepts

What are "taxable gross receipts"?

• Taxable gross receipts (TGR) — Taxable gross receipts (TGR) include all gross receipts sitused to Ohio, with limited exclusions. For a sole proprietor, this generally means total revenue from sales of goods or services to Ohio customers. Included: - Revenue from sale of goods/services to Ohio customers - Gross receipts from Ohio-sitused transactions (based on where the customer receives the benefit) Excluded (not exhaustive): - Receipts from sales of motor fuel (subject to motor fuel tax) - Receipts from sales of a business or substantial assets in a single transaction - Interest income from federal obligations - Certain insurance premiums - Receipts from qualifying exempt organizations

Situsing rules

• Situsing rules — Tangible personal property: Sitused to Ohio if delivered to or received by the customer in Ohio. Services: Sitused to Ohio if the benefit of the service is received in Ohio. Real property: Sitused to Ohio if the property is in Ohio.

Relationship to Ohio income tax

• Relationship to Ohio income tax — The CAT is a separate tax from Ohio income tax. It is a gross receipts tax, not an income tax. A business may owe both CAT and Ohio income tax. CAT payments are NOT deductible on the Ohio income tax return (ORC § 5747.01(A) excludes the CAT from the definition of "taxes" for deduction purposes). However, CAT payments may be deductible on the federal return as a business expense. (ORC § 5747.01(A))

Section 4: Filing requirements (2025+)

Registration

• Registration requirements — Businesses must register for CAT within 30 days of exceeding $6 million in Ohio TGR. Registration is done via the Ohio Business Gateway or Form CAT 1. Failure to register timely: penalty of up to $100/month, not to exceed $1,000.

Filing frequency

• Quarterly returns only — Quarterly returns only (annual filing was eliminated after the 2023 annual return). Quarterly returns are due by the last day of the second month after the quarter ends.

Quarterly filing schedule

Quarter	Period	Due date
Q1	Jan 1 – Mar 31	May 10
Q2	Apr 1 – Jun 30	Aug 10
Q3	Jul 1 – Sep 30	Nov 10
Q4	Oct 1 – Dec 31	Feb 10 (following year)

Cancellation

• Cancellation of CAT account — Businesses with $6 million or less in TGR for 2025 can cancel their CAT account via the Ohio Business Gateway or by submitting a Business Account Update Form (BA-UF). A final return is required.

Section 5: 2024 reform summary (HB 33)

Am. Sub. HB 33 of the 135th Ohio General Assembly made the following changes:

1. Exclusion amount tripled (2024): Increased from $1 million to $3 million.
2. Exclusion amount doubled again (2025+): Increased to $6 million.
3. Annual minimum tax eliminated: The tiered minimum tax ($150–$2,600) was eliminated entirely starting 2024.
4. Annual filing eliminated: Only quarterly returns are accepted for tax periods beginning 2024+.
5. Tax rate unchanged: The 0.26% rate was NOT changed.

Net effect: Approximately 90% of previously filing CAT taxpayers are now exempt from the tax.

Section 6: Refusal catalogue

• REFUSE-CAT-1 — REFUSE to prepare a CAT return for a combined/consolidated group without complete group member information. Combined reporting for affiliated groups requires specialized handling. (REFUSE-CAT-1)
• REFUSE-CAT-2 — REFUSE to determine situsing for complex multi-state service transactions without reviewer guidance. The benefit-of-the-service-received test can be ambiguous for services provided remotely. (REFUSE-CAT-2)
• REFUSE-CAT-3 — REFUSE to advise on whether a specific receipt category is excluded from TGR without confirming against ORC § 5751.01(F)(2) exclusion list. (REFUSE-CAT-3 / ORC § 5751.01(F)(2))

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.

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