Ohio Commercial Activity Tax (CAT): who owes it and how to file

What is the Ohio Commercial Activity Tax?

The Commercial Activity Tax, or CAT, is Ohio's tax on the privilege of doing business in the state. It is measured by gross receipts, not profit. That is the part that surprises people. A business can lose money for the year and still owe CAT, because the tax is figured on what came in the door, with no deduction for cost of goods sold, payroll, rent, or other expenses (ORC 5751.01(F)).

The CAT is set out in ORC Chapter 5751 and is administered by the Ohio Department of Taxation. According to the Department's 2026 Small Business Tax Guide, it applies to every type of business regardless of form: sole proprietorships, partnerships, LLCs, and all kinds of corporations. Retailers, manufacturers, and service providers such as lawyers, accountants, and doctors are all covered.

The CAT is separate from the taxes most new owners register for first. It is not sales tax, which you collect from customers under a vendor's license. It is not income tax. And it is not city tax, which is covered in our guide to Ohio municipal income tax for businesses. For the full picture of what an LLC pays, see our overview of Ohio LLC taxes.

Who owes the Ohio CAT in 2025 and later?

Since January 1, 2025, a business owes the CAT only if its Ohio taxable gross receipts for the calendar year are more than $6 million. ORC 5751.01(R) defines the "exclusion amount" as $3 million beginning in 2024 and $6 million beginning in 2025. Businesses at or under that line are not subject to the tax and do not register.

The change came in stages. The table below shows how the threshold and the old minimum tax moved, as stated on the Department of Taxation's CAT page.

Some businesses are outside the CAT no matter how large they are. The Department lists nonprofit organizations, financial institutions that pay the financial institutions tax, insurance companies that pay the Ohio insurance premiums tax, certain affiliates of financial institutions, and some public utilities that pay the public utility excise tax.

Most small and mid-size Ohio businesses will never reach $6 million in Ohio receipts. The ones that need to watch the line are growing distributors, contractors, and multi-location companies whose receipts are climbing year over year.

Track Ohio receipts as the year goes

The test is calendar-year receipts, and the 30-day registration clock starts when you cross $6 million, not when the year ends. A company that does $7 million a year may cross the line in October, and its registration is due in November. Waiting for the year-end books means registering late.

A simple habit handles it. Each month, have your bookkeeper report year-to-date receipts that would count as Ohio receipts: goods delivered to Ohio addresses plus the Ohio share of service revenue. Leave out the amounts the statute excludes, such as interest and loan principal. Once the running total passes about $4.5 million, put a note on the calendar to check it every two weeks.

Commonly owned companies need extra care. The registration rules in ORC 5751.04(B)(7) contemplate consolidated elected and combined taxpayer groups, so two related companies that are each under $6 million may still need to be looked at together. That is a question for your accountant before the deadline, not after.

What counts as taxable gross receipts for the CAT?

ORC 5751.01(F) defines gross receipts as the total amount a business realizes from activities that contribute to the production of gross income. That includes sales of property, fees for services, and amounts received for someone else's use of your property or capital.

The same section lists many amounts that are not gross receipts. A few that matter to ordinary businesses:

• Interest income, except interest on credit sales (ORC 5751.01(F)(2)(a)).
• Dividends and distributions from corporations, and distributive shares of income from a pass-through entity (ORC 5751.01(F)(2)(b)).
• Receipts from selling capital or business-use assets described in Internal Revenue Code sections 1221 and 1231 (ORC 5751.01(F)(2)(c)).
• Repayment of loan principal and similar returns of principal (ORC 5751.01(F)(2)(d)).
• Compensation an employee receives for services to an employer (ORC 5751.01(F)(2)(g)).

Only Ohio receipts count

The CAT reaches receipts sitused to Ohio. Per the Department's 2026 guide, a sale of goods is generally an Ohio receipt only if the property is delivered to a location in Ohio. A service receipt is sitused to Ohio in proportion to how much of the purchaser's benefit is received in Ohio. So a manufacturer that ships most of its product out of state may have total sales well over $6 million and Ohio taxable gross receipts well under it.

Does an out-of-state business owe the Ohio CAT?

It can. An out-of-state business owes the CAT if it has substantial nexus with Ohio and its Ohio taxable gross receipts exceed the exclusion amount. One way to have nexus is "bright-line presence," defined in ORC 5751.01(I). A business has bright-line presence for the calendar year if any of these applies:

• Property in Ohio worth at least $50,000 at any time during the year. Rented property is valued at eight times the net annual rent.
• Ohio payroll of at least $50,000 during the year, including amounts paid to others for services performed in Ohio on its behalf.
• Ohio taxable gross receipts of at least $500,000 during the year.
• At least 25% of its total property, payroll, or gross receipts in Ohio.
• Domicile in Ohio.

With the $6 million exclusion in place, the receipts test above only matters once a company is past $6 million in Ohio receipts anyway. In practice the question for a remote seller is simple: are your Ohio receipts over $6 million for the year?

The CAT is a tax registration, not a Secretary of State filing. A company that needs to qualify to do business in Ohio does that separately; see our guide to Ohio foreign LLC registration.

What is the Ohio CAT rate, and how is it calculated?

The rate is two and six-tenths mills per dollar, or 0.26%, of taxable gross receipts after subtracting the exclusion amount (ORC 5751.03). The exclusion comes off once per calendar year, not once per quarter.

ORC 5751.03 has the taxpayer apply the full exclusion to its first-quarter return. Any part of the $6 million not used in the first quarter carries forward to later quarters of the same year. It does not carry into the next year.

Worked example

A business has $8 million in Ohio taxable gross receipts for the year, spread across four quarters:

Total CAT for the year: $5,200, which is 0.26% of the $2 million above the exclusion. Real returns can be messier, especially for businesses that file as part of a group, so have your accountant prepare them.

How to register for the Ohio Commercial Activity Tax

ORC 5751.04(B) requires a business to register with the Tax Commissioner no later than 30 days after its taxable gross receipts for a calendar year first exceed the exclusion amount. The Department's guide says registration is done electronically through the Ohio Business Gateway at gateway.ohio.gov, and that a new account takes about three business days to be ready for filing.

The registration asks for the information listed in ORC 5751.04(B):

• The business's name and primary address.
• Business or industry codes.
• Its federal employer identification number or Social Security number. If you don't have an EIN yet, our EIN service can get one.
• Organization type.
• The date the business first became subject to the tax.
• For a consolidated elected or combined group, the name, address, federal ID number, and organization type of each commonly owned member.

Registration fee

There is a $20 registration fee per person, up to $200 for a consolidated or combined group. It is not paid separately. The Department deducts it from the first tax payment after registration (ORC 5751.04(C)(1)).

Late registration

If a business registers late, an additional fee of $100 per month or part of a month applies, up to $1,000. The Tax Commissioner may abate it (ORC 5751.04(C)(2)). Watch your year-to-date Ohio receipts each quarter once you pass $4 or $5 million, so the 30-day clock does not catch you by surprise.

Ohio CAT filing frequency and quarterly due dates

Every CAT taxpayer files quarterly. The Department's CAT page says annual filing was eliminated starting with tax year 2024, and ORC 5751.051(A) requires a return no later than the 10th day of the second month after each calendar quarter.

If a due date falls on a weekend or holiday, the return and tax are due the next business day. Returns and payments are filed electronically through the Gateway, and amended returns are filed there too.

The fourth-quarter return does extra work. Under ORC 5751.051(C), it serves as the annual return for the year: it picks up any receipts not reported earlier in the year and adjusts any that were over-reported. If a business stops being a taxpayer partway through the year, its last return plays that role.

What if your receipts drop back under $6 million?

Revenue goes both ways. If a registered business is no longer a taxpayer subject to the CAT, ORC 5751.04(E) says it must notify the Tax Commissioner that its registration should be cancelled. Do not simply stop filing. An open account with no returns can produce delinquency notices and estimated assessments.

A few situations deserve a careful look before you cancel:

• Receipts that fell just under $6 million and may cross it again next year.
• A business that sold or merged a division during the year.
• Commonly owned companies that may have to be measured as a group rather than one at a time.

Keep your quarterly receipts workpapers, Gateway confirmations, and any Department correspondence together. If a notice arrives years later, those records are what answer it.

CAT notices, assessments, and your Ohio statutory agent

Day-to-day CAT mail from the Department goes to the address on your tax account. Your statutory agent comes in when a tax dispute turns into a lawsuit or a collection action against the company, because legal process against an Ohio LLC or corporation is served on its statutory agent.

With our Ohio statutory agent service, a summons or garnishment is treated as urgent: every authorized contact is notified, and we call if nobody acknowledges it. State and tax correspondence that comes to us is scanned to your portal the same business day, and we keep the paper original for three years. We do not prepare tax returns or track tax deadlines, and nothing on this page is tax advice.

When to talk to your accountant about the CAT

The basic rules are clear: $6 million exclusion, 0.26% rate, quarterly returns, 30 days to register. Applying them to a real business takes judgment. Talk to your accountant if any of these apply to you:

• Your Ohio receipts are approaching $6 million, or you are not sure which receipts count as Ohio receipts.
• You sell services to customers in several states and need to source the receipts by where the benefit is received.
• You own more than one company and need to know whether they register as a consolidated or combined group.
• You received a CAT notice or assessment and want to know whether to pay, amend, or appeal.

If you are just forming the company, the CAT is likely years away. Our guide on how to start an LLC in Ohio covers the registrations to handle first.