Ohio CAT is a gross receipt-based tax, effective July 1, 2005. Main features
of the tax are as follows:
- The
tax is imposed at a rate of 0.26% on taxable gross receipts,
subject to a phase-in over five years. For tax periods
from July 1, 2005 through March
31, 2006, the tax is prorated at 23%. From April 1, 2006 through March
31, 2007, the tax is prorated at 40%. The phase-in percentage
increases 20% until
April 1, 2009, at which time the tax is fully phased-in.
- Most
businesses with taxable gross receipts of $150,000 or
more per year are subject to CAT.
- Taxability
is not limited to persons with a physical presence.
- Gross
receipts are broadly defined, with few deductions.
- Combined
reporting is mandatory unless a consolidated return is
elected.
- The
first measurement period for all taxpayers is for receipts
received from July 1, 2005 to December 31, 2005. This
return is due February 10, 2006.
Nexus Nexus exists for CAT purposes if:
- The
person owns or uses a part or all of its capital in
the state
- The
person has a certificate to do business in Ohio
- The
person satisfies constitutional nexus standards, or
- The
taxpayer has any of the following in Ohio:
- $50,000
of property
- $50,000
of payroll
- $500,000
of gross receipts
- 25
percent of its combined property, payroll and sales;
or domicile in the state.
Filing Methodology
For
taxpayers that are members of a commonly controlled group
of persons subject to the CAT, there are two permissible
filing methodologies: combined or consolidated. Taxpayers
may elect to file on a consolidated basis. Taxpayers that
do not elect consolidated filing are required to file on
a combined basis. The following chart summarizes the major
differences between the two filing options:
|
Consolidated |
Combined
|
| Persons explicitly excluded from CAT by
Ohio legislation |
Included |
Excluded |
| Non-nexus persons |
Included |
Excluded (potential benefit of this method) |
| Intercompany receipts |
Excluded (potential benefit of this method) |
Included |
| Ownership test |
> =
50 percent or
> = 80 percent
|
> 50
percent |
|
|
Disclaimer
|
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information contained herein is of a general nature and
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timely information, there can be no guarantee that such information
is accurate as of the date it is received or that it
will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough
examination
of the particular situation.
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