GuideOhio Commercial Activity Tax
The Ohio Commercial Activity Tax, explained for Columbus business owners.
The Ohio Commercial Activity Tax (CAT) is a tax on gross receipts, not profit, charged to businesses with taxable gross receipts sourced to Ohio above an annual exclusion. Since the 2024 and 2025 changes the exclusion is high enough that many smaller Columbus companies no longer owe it, but companies above the threshold file quarterly, and the rules on what counts as an Ohio receipt still catch manufacturers, distributors and contractors who sell across state lines.
Who has to pay
Any person or business with taxable gross receipts sourced to Ohio above the annual exclusion, regardless of entity type. Corporations, pass-through entities, sole proprietors and most nonprofits with unrelated business activity are all in scope. Receipts are sourced to Ohio based on where the customer receives the goods or the benefit of the service, not where your office is.
Businesses below the exclusion are not required to file, and businesses that registered in earlier years when the threshold was lower may be able to cancel their account. Check before you file a return you do not owe.
The exclusion and the rate
The exclusion was raised substantially for 2024 and again for 2025 (check the current-year figure with the Ohio Department of Taxation before relying on it). Receipts above the exclusion are taxed at a flat rate of 0.26 percent. There is no longer an annual minimum tax.
Because the tax is on gross receipts, a low-margin distributor with high sales can owe more CAT than a high-margin consultancy with a third of the revenue. Margin does not matter; Ohio-sourced receipts do.
Filing and deadlines
Taxpayers above the exclusion file quarterly through the Ohio Business Gateway, with returns and payment due on the 10th day of the second month after each calendar quarter ends (May 10, August 10, November 10 and February 10). Annual filing has been eliminated for recent years; confirm the current filing frequency when you register.
Registration is required once you expect to exceed the exclusion. Registering late and filing late both carry penalties, and interest runs from the original due date.
Mistakes Columbus owners make most often
Sourcing all receipts to Ohio because the company is in Ohio. Sales shipped to customers in other states are generally not Ohio receipts. The reverse is also true: an out-of-state seller with enough Ohio sales owes CAT.
Forgetting related entities. Companies under common ownership may be required or permitted to file as a combined or consolidated group, which changes how the exclusion applies.
Treating the CAT as income tax. It is not deductible as a reduction of Ohio income tax, it is a cost of doing business, and it belongs in the pricing conversation for low-margin lines.
How it interacts with municipal net profit tax
The CAT is a state tax on receipts. Columbus and the surrounding cities separately tax net profit at the municipal level, apportioned by payroll, property and sales. A company can owe CAT and municipal net profit tax in the same year on the same activity, and the filings have different thresholds, different apportionment rules and different due dates.
Most owners who come to us with a CAT notice also have a municipal filing gap somewhere. We review both together.
When to call
If you received a notice, if you are not sure whether your receipts are over the exclusion, if you sell into or out of Ohio in volume, or if you have more than one entity. The first conversation is with Marcus Reyes and costs nothing. See the business tax page for how the engagement works.
This guide is general information for Columbus business owners, not tax advice for your situation. Thresholds and filing rules change; verify current-year figures with the Ohio Department of Taxation or with us before acting. Mapleton & Reyes CPAs is a fictional firm created for a portfolio concept site.
FAQBefore you call
Common questions about the CAT.
01Is the Ohio CAT an income tax?
No. It is a tax on gross receipts sourced to Ohio, charged regardless of profit. A company that lost money can still owe CAT if its Ohio receipts exceed the exclusion.
02Do I need to file if my receipts are below the exclusion?
Generally no, and if you registered in a prior year when the threshold was lower you may be able to cancel your account. Confirm the current-year exclusion before deciding.
03How are receipts sourced to Ohio?
Goods: where the customer receives them. Services: where the customer receives the benefit. Rent and royalties: where the property is located or used. The rules have exceptions; when in doubt, ask.
04What if I have missed CAT filings?
File the missing quarters, pay the tax and interest, and request penalty abatement where the facts support it. The exposure is usually smaller than owners fear, and smaller still if you act before the Department contacts you.
→Next step
Not sure whether you owe it? Ask Marcus.
Send the notice or the question. A partner replies within 48 hours.