AUDITOR
FAQ: PERSONAL PROPERTY TAX
Tangible Personal Property Tax Phase Out
One of Ohio's most significant tax reforms in decades began in 2005, when the Ohio General Assembly launched a five-year phase-out of the tangible personal property tax with House Bill 66. This phase out, which was complete after 2008 for nearly all general taxpayers, includes a system of direct payments from the state to schools and local governments in order to help offset the loss of property tax revenue.
The tangible personal property tax was replaced with the Commercial Activity Tax (CAT). The CAT is an annual tax imposed on the privilege of doing business in Ohio, measured by gross receipts from business activities in Ohio. Businesses with Ohio taxable gross receipts of $150,000 or more per calendar year must register for the CAT, file all the applicable returns, and make all corresponding payments through the state of Ohio Department of Taxation.Form 310, For Storage Only: Inventory held in storage in a private warehouse in Ohio.
One of Ohio's most significant tax reforms in decades began in 2005, when the Ohio General Assembly launched a five-year phase-out of the tangible personal property tax with House Bill 66. This phase out, which was complete after 2008 for nearly all general taxpayers, includes a system of direct payments from the state to schools and local governments in order to help offset the loss of property tax revenue.
The tangible personal property tax was replaced with the Commercial Activity Tax (CAT). The CAT is an annual tax imposed on the privilege of doing business in Ohio, measured by gross receipts from business activities in Ohio. Businesses with Ohio taxable gross receipts of $150,000 or more per calendar year must register for the CAT, file all the applicable returns, and make all corresponding payments through the state of Ohio Department of Taxation.Form 310, For Storage Only: Inventory held in storage in a private warehouse in Ohio.
R.C. 5751.07 was amended in the most recent budget bill to allow the Department to require annual CAT taxpayers to file and pay electronically for returns filed on or after Jan. 1, 2014. Taxpayers may file and pay electronically through the Ohio Business Gateway at business.ohio.gov. Alternatively, annual taxpayers may utilize TeleFile as a means for filing and paying the annual CAT return electronically beginning in April 2014.
For tax periods beginning on Jan. 1, 2014 and thereafter, the annual minimum tax (AMT) will become a tiered structure, and taxpayers will pay an amount that corresponds with their overall commercial activity. The taxpayer will utilize its previous calendar year’s taxable gross receipts to determine the current year’s AMT. For more information, please refer to information release CAT 2013-05 – Commercial Activity Tax: Annual Minimum Tax Tiered Structure- Issued October, 2013.
Beginning in calendar year 2013, calendar quarter taxpayers shall apply the full $1 million exclusion amount to the first calendar quarter return for that calendar year and may carry forward and apply any unused exclusion amount to subsequent calendar quarters within that same calendar year. Any unused exclusion amount from calendar year 2012 may not be carried forward into calendar year 2013.
For tax periods beginning on Jan. 1, 2014 and thereafter, the annual minimum tax (AMT) will become a tiered structure, and taxpayers will pay an amount that corresponds with their overall commercial activity. The taxpayer will utilize its previous calendar year’s taxable gross receipts to determine the current year’s AMT. For more information, please refer to information release CAT 2013-05 – Commercial Activity Tax: Annual Minimum Tax Tiered Structure- Issued October, 2013.
Beginning in calendar year 2013, calendar quarter taxpayers shall apply the full $1 million exclusion amount to the first calendar quarter return for that calendar year and may carry forward and apply any unused exclusion amount to subsequent calendar quarters within that same calendar year. Any unused exclusion amount from calendar year 2012 may not be carried forward into calendar year 2013.
For more information regarding the CAT: