Oh cat

Ohio Commercial Activity Tax (CAT) Calculator

Compute Ohio CAT liability for businesses with Ohio-sourced gross receipts. Handles the $6M exclusion threshold, 0.26% flat rate, quarterly filing, and bright-line nexus rules per Ohio Department of Taxation.

When to Activate

• User mentions "Ohio CAT", "commercial activity tax", "Ohio business tax", "Ohio gross receipts"
• Computing quarterly or annual CAT liability
• Determining if a business must register for the CAT
• Evaluating Ohio nexus for an out-of-state business
• Any business with gross receipts sourced to Ohio

What This Tax Is

Ohio's Commercial Activity Tax (CAT) is a gross receipts tax — a privilege tax measured by gross receipts from business activity in Ohio. Unlike income taxes, the CAT does not allow deductions for expenses, costs of goods sold, or other business costs¹.

The CAT applies to all business entity types — sole proprietors, partnerships, LLCs, corporations, and S-corps. It is separate from Ohio's corporate franchise tax (which it replaced in 2005) and municipal income taxes. Financial institutions and insurance companies are generally exempt¹.

As of 2025, the exclusion threshold increased to $6 million, meaning approximately 90% of Ohio businesses no longer owe the CAT².

Rate Structure

The CAT has a single flat rate with no tiers or classifications:

Component	Amount	Source
Exclusion threshold	$6,000,000 (effective 2025)	Brady Ware — CAT Update
Tax rate	0.26% on gross receipts over $6M	Brady Ware — CAT Update

Formula:

CAT = 0.0026 × max(ohio_taxable_gross_receipts - $6,000,000, 0)

No base tax amount. No tiered rates. No classification-based rates. The Annual Minimum Tax (AMT) was eliminated as part of the 2024 threshold changes².

Threshold History

Year	Exclusion Threshold	Source
Through 2023	$150,000	RubinBrown — CAT Changes
2024	$3,000,000	RubinBrown — CAT Changes
2025+	$6,000,000	Brady Ware — CAT Update

Surcharge

Ohio does not impose an additional surcharge on the CAT for high-grossing businesses.

Credits and Exemptions

Exempt Entities

Entity Type	Source
Financial institutions (subject to separate financial institutions tax)	Ohio DOR — CAT
Insurance companies (subject to separate insurance premium tax)	Ohio DOR — CAT
Certain qualifying dealers in intangibles	Ohio DOR — CAT

Ownership Aggregation Rule

Individuals holding over 50% ownership in multiple businesses must combine gross receipts across all owned entities to determine whether the $6M threshold is met². This prevents splitting a business into smaller entities to avoid the CAT.

No Cost Subtraction

Unlike Oregon's CAT, Ohio's CAT offers no subtraction for costs, expenses, or labor. The tax is computed on gross receipts without any deductions¹.

Filing Requirements

Registration Threshold

Businesses with more than $6 million in Ohio taxable gross receipts must register for the CAT. Businesses at or below $6 million may cancel their CAT account².

Filing Frequency and Due Dates

The CAT is filed quarterly for businesses above the threshold:

Quarter	Period	Due Date	Source
Q1	Jan 1 – Mar 31	May 10	Brady Ware — CAT Update
Q2	Apr 1 – Jun 30	August 10	Brady Ware — CAT Update
Q3	Jul 1 – Sep 30	November 10	Brady Ware — CAT Update
Q4	Oct 1 – Dec 31	February 10	Brady Ware — CAT Update

Due on the 10th day of the second month following the end of each calendar quarter.

Situsing Rules

Gross receipts are sourced ("sitused") to Ohio based on where the benefit of the service or product is received, not where the business is located. Ohio uses an ultimate destination rule for tangible goods and a benefit received rule for services³.

Nexus

Ohio uses a bright-line economic nexus standard — the first state to adopt one (2005). A business has CAT nexus if any of the following apply during the calendar year⁴:

Nexus Trigger	Threshold	Source
Ohio taxable gross receipts	$500,000	ORC 5751.01
Ohio property	$50,000	ORC 5751.01
Ohio payroll	$50,000	ORC 5751.01
25% of total property, payroll, or receipts in Ohio	Any amount	ORC 5751.01
Authorized to do business in Ohio	—	ORC 5751.01
Owns or uses capital in Ohio	—	ORC 5751.01

Note: Having nexus does not mean you owe tax — you must also exceed the $6M gross receipts threshold. Many businesses have nexus but fall below the threshold⁴.

City/Local Tax Overlays

Ohio cities impose municipal income taxes on business net profits — these are net income taxes, not gross receipts taxes, and are separate from the CAT.

Major Ohio cities with business income taxes:

City	Rate	Tax Type	Source
Columbus	2.50%	Net profit	Columbus Income Tax
Cleveland	2.50%	Net profit	CCA Tax Rates
Cincinnati	1.80%	Net profit	Cincinnati Finance

See references/city-taxes.md for full details on rates, filing requirements, and administration.

Calculation Process

Step 1: Determine Ohio Taxable Gross Receipts

Sum all gross receipts sourced to Ohio using situsing rules (ultimate destination for goods, benefit received for services).

Step 2: Check Threshold

• At or below $6M: No tax due. Consider canceling CAT account.
• Over $6M: Proceed to Step 3.

Step 3: Compute CAT

cat = 0.0026 × (ohio_gross_receipts - $6,000,000)

Step 4: Quarterly Payments

Divide annual estimated liability by 4 for quarterly payments.

Step 5: Check for Municipal Income Taxes

If operating in an Ohio city with a municipal income tax, compute city net profit tax separately.

Example: Ohio Manufacturing Company

Annual Ohio taxable gross receipts: $15,000,000

Step 1: Ohio gross receipts = $15,000,000

Step 2: Over $6M → tax applies

Step 3: CAT = 0.0026 × ($15,000,000 - $6,000,000)
        CAT = 0.0026 × $9,000,000
        CAT = $23,400.00

Step 4: Quarterly payment = $23,400 / 4 = $5,850.00

Annual CAT liability: $23,400.00

Common Mistakes

1. Not aggregating ownership — Individuals with 50%+ ownership in multiple businesses must combine receipts to determine if the $6M threshold is met²
2. Deducting expenses — Ohio's CAT is on gross receipts with no deductions for COGS, labor, or other costs (unlike Oregon's CAT)¹
3. Confusing CAT with municipal income tax — The CAT is a state-level gross receipts tax; municipal taxes are separate net income taxes on business profits
4. Missing the nexus triggers — Nexus exists at $500K in Ohio receipts, but tax isn't due until $6M. Registration and filing obligations can differ⁴
5. Wrong situsing — Receipts are sourced to where the benefit is received, not where the seller is located³
6. Not canceling unused accounts — Businesses that drop below $6M should cancel their CAT account to avoid unnecessary filing obligations²
7. Missing quarterly due dates — Due on the 10th of the second month after quarter-end (not end of month like many other states)

References

Official Ohio Department of Taxation

• Commercial Activity Tax Overview
• Ohio Gateway — CAT Filing

Ohio Revised Code

• ORC § 5751.01 — CAT Definitions and Nexus
• ORC Chapter 5751 — Commercial Activity Tax

Analysis

• Brady Ware — 2025 Ohio CAT Updates
• RubinBrown — 2025 Changes to Ohio CAT
• Taft Law — Ultimate Destination Rule

City Taxes

• Columbus Income Tax Division
• Cleveland CCA Tax Rates
• Cincinnati Finance — Income Taxes

Output Format

When computing CAT, present results as:

## Ohio CAT — [Period]

| Item | Amount |
|---|---|
| Ohio Taxable Gross Receipts | $XX,XXX,XXX.XX |
| Exclusion Threshold | ($6,000,000.00) |
| Taxable Amount | $XX,XXX,XXX.XX |
| Rate | 0.26% |
| **Total CAT Due** | **$XX,XXX.XX** |
| Quarterly Payment | $X,XXX.XX |
| Due Date | [date] |

*Municipal income taxes (if applicable):*
| City | Rate | Net Profit | Tax Due |
|---|---|---|---|
| [City] | X.XX% | $XX,XXX | $X,XXX |

Constraints

• MUST use Decimal arithmetic for all money calculations — never floats
• MUST NOT suggest deducting expenses from CAT gross receipts
• MUST check ownership aggregation rules for multi-entity owners
• MUST apply situsing rules (ultimate destination / benefit received) when determining Ohio receipts
• MUST check for municipal income tax obligations in addition to state CAT
• MUST warn if gross receipts approach the $6M threshold within 10%
• MUST warn and show extrapolation method when estimating annual liability from partial-year data
• MUST note that quarterly due dates are the 10th of the second month after quarter-end
• MUST cite sources when presenting rates or thresholds to the user

Disclaimer

This provides general tax guidance based on publicly available information. It is not legal or tax advice. Consult a qualified tax professional for your specific situation.

Footnotes

1. Ohio Department of Taxation — Commercial Activity Tax ↩ ↩² ↩³ ↩⁴

2. Brady Ware — 2025 Ohio CAT Updates ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶

3. Taft Law — Ultimate Destination Rule ↩ ↩²

4. Ohio Revised Code § 5751.01 and Plante Moran — CAT Bright-Line Nexus ↩ ↩² ↩³