Commercial Activity Tax Update

Mr. Don Breece, Farm Management Specialist, OSU Extension Center at Lima

Farmers with gross sales of over $150,000 join other commercial businesses subject to a new Ohio tax (and no, it is not a tax on your barn cats!). As result of this years Ohio Budget Bill, the Commercial Activity Tax (CAT) came into being. In a question to the Ohio Department of Taxation, whether farms were included, the reply was as follows: "The CAT was intended as a broad based, low rate privilege tax. As such, it applies to farmers and other agricultural enterprises, once these entities reach $150,000 in taxable gross receipts." A second question was asked about milk and other livestock sales from Ohio farms to out-of-state markets. Would these sales be a part of the gross income figure and subject to the tax? The answer was that "the gross receipt has to be sitused to Ohio. If the dairy farm milk is sold outside Ohio, the farm is not subject to CAT. See the Ohio Revised Code 5751.033 for situsing provision."

For businesses with gross receipts below $150,000, no CAT is due. For businesses with gross receipts between $150,000 and 1 million dollars, a flat $150 tax will be paid. A tax rate schedule will kick in for businesses with gross receipts over 1 million dollars. All businesses with receipts of over $150,000 per year must pay a one time registration fee; $20 will cover most farms ($200 maximum fee). On line registration is encouraged (a reduced $15 is charged for web registration), and after November 30, a fee will not be charged. For the fees already paid, they will be deducted from the tax due. A web link is available to explain more about the CAT and other new Ohio tax information at: