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The Commercial Activity Tax, or CAT, is a privilege tax – a tax levied in exchange for a privilege or license granted to the taxpayer – measured by a taxpayer’s measurable gross receipts generated from business activities in Ohio.
Who must pay the CAT?
Absent an exemption, individuals and businesses whose taxable gross receipts exceed the annual exclusion amount must pay the CAT. Prior to 2024, the exclusion amount was set at $150,000. Recent updates in the law have increased the exclusion amount as follows:
- In 2023, taxpayers with taxable gross receipts in a calendar year > $150,000 are subject to CAT.
- In 2024, taxpayers with taxable gross receipts in a calendar year > $3,000,000 are subject to CAT.
- In 2025 and thereafter, taxpayers with taxable gross receipts in a calendar year > $6,000,000 are subject to CAT.
Over the years, Ohio Farm Bureau advocated extensively to reduce the burden of the CAT on Ohio’s farmers and small businesses. The minimum tax, which many farmers and small businesses were subject to, was eliminated in 2024. This combined with the increasing threshold has nearly eliminated the burden of the CAT on agriculture, relieving many Ohio farmers from the additional tax filing strain.
What is a ‘taxable gross receipt’?
“Gross receipts” are the total amount realized by a person, without deduction for the cost of goods sold or other expenses incurred, that contributes to the production of gross income of the person, including the fair market value of any property and any services received, and any debt transferred or forgiven. Most business types of receipts from the sale of goods delivered within Ohio or services sourced in Ohio are subject to CAT. Examples of gross receipts not subject to the CAT tax include interest (other than from credit sales), dividends, capital gains, wages reported on a W-2, or gifts. Receipts from assets used in the taxpayer’s trade or business are another example of excluded receipts. Receipts from the sale of livestock used for draft, breeding, dairy, or sporting purposes (not including chickens) are exempt from the CAT. Also, a farmer selling their land together with the crop on that land may exclude these receipts, but crops harvested to be sold on their own are not excludable receipts.
How and when do I pay CAT?
Taxpayers with taxable gross receipts greater than the set exclusion amount for that taxable year must register for CAT with the Ohio Department of Taxation. Starting in 2024, all CAT taxpayers must file for quarterly tax periods beginning on or after January 1, 2024. The CAT is paid online via an online account made by the taxpayer. Taxpayers with an open CAT account must file returns. If a taxpayer does not cancel their CAT account and they fail to file the required returns, they may be subject to delinquency notices. Taxpayers that no longer have taxable gross receipts greater than the exclusion amount can deactivate their account online. Canceled accounts can be reactivated in the event a taxpayer’s taxable gross receipts exceed the exclusion amount. Taxpayers have 30 days to register and pay the CAT once they exceed the exclusion amount.
For more information
This article provides only a brief overview of Ohio’s Commercial Activity Tax obligations for educational purposes only. For more information about the CAT filing obligations, visit the Ohio Department of Taxation’s Commercial Activity Tax webpage.
My first recommendation in your journey is to start out with a local farming friend or mentor along with joining an organization like Ohio Farm Bureau.
We’re just so thankful for the Farm Bureau and the foundation for helping put this together. And of course, the Boyert family for the vision they had with this grant. It’s jumping us forward 10 years. It’s unbelievable.
I could not have done it without the resources I have found through Farm Bureau.
It wasn’t until I joined the Wilmington College Collegiate Farm Bureau that I truly saw how my passion could translate into leadership, advocacy and a career.
The issue of property taxation remains as one of the biggest challenges our members face today. Ensuring agricultural property is valued for its agricultural potential and not development is critical to the continued success of Ohio agriculture.
Through the Select Partner program, we became educated in farm insurance and weren't just selling policies. It became more and more clear why farmers need an advocate like Ohio Farm Bureau.
So many of the issues that OFBF and its members are advocating for are important to all Ohioans. I look at OFBF as an agricultural watchdog advocating for farmers and rural communities across Ohio.
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