Ohio does not have a traditional corporate income tax. Instead it has the Commercial Activity Tax, usually called the CAT, which is a tax on gross receipts rather than profit. For years it reached almost every Ohio business with meaningful sales, including many small businesses that paid a minimum tax just to keep their account open.
That changed. If you run a small business in Greater Cleveland, there is a good chance you no longer owe the CAT at all, and a real chance you are still getting notices for returns you do not need to file. I am Josh Katz, a CPA in Beachwood, and this is the question I get most often from local owners about Ohio business tax.
What changed in 2024 and 2025
Ohio’s budget bill, House Bill 33, overhauled the CAT:
The annual minimum tax was eliminated starting with 2024. Businesses no longer pay a fee simply for having a CAT account.
The exclusion went up sharply. The first $3 million of Ohio taxable gross receipts was excluded for 2024, and the first $6 million is excluded for 2025 and every year after.
Annual filing was discontinued. Businesses that still owe the tax now file quarterly.
The rate itself did not change. It is still 0.26%, applied only to Ohio taxable gross receipts above the $6 million exclusion.
Do you still need to file?
If your business has $6 million or less in Ohio taxable gross receipts for the year, you generally owe no CAT and do not need to file.
If you are above that level, you pay 0.26% on the amount over $6 million. A business with $7 million in Ohio taxable gross receipts pays tax on $1 million, which works out to $2,600 for the year. The exclusion is applied on a calendar year basis, not reset every quarter.
Quarterly returns are due on the 10th day of the second month after each quarter ends: May 10, August 10, November 10 and February 10. A business that crosses the $6 million threshold must register within 30 days. Returns are filed through the Ohio Business Gateway, since the telephone filing option was discontinued in 2026.
Related businesses need to be careful. Companies that file as a combined or consolidated group are treated as one taxpayer, so the $6 million exclusion applies to the whole group, not to each entity separately.
If you are under the threshold, close the account
Many small businesses that registered for the CAT years ago never closed their accounts. If your receipts are now under $6 million and you expect them to stay there, your CAT account should generally be canceled through the Ohio Business Gateway. Leaving it open can lead to delinquency notices for returns you no longer owe. If you have already received one of those notices, do not ignore it. It usually takes a short filing to clean up.
What the CAT does not cover
Falling under the CAT threshold does not mean your business is done with Ohio taxes. You still have municipal income tax through RITA or CCA, employer withholding if you have staff, sales tax if you sell taxable goods or services, and Ohio income tax on the profit that flows through to you as an owner.
Growing businesses should watch the number
If your business is approaching $6 million in Ohio receipts, the time to plan is before you cross the line, not after. Clean monthly books make it easy to track Ohio receipts year to date, see the threshold coming, and register on time.
How I help
I work with small businesses across Beachwood, Cleveland, Solon, Shaker Heights and the rest of Cuyahoga County. I can review whether you still need a CAT account, clean up old notices, and keep your books in shape so questions like this have clear answers. Monthly bookkeeping starts at $350, with flat fees quoted up front. See the full list on my services page.
Frequently asked questions
What is the Ohio CAT threshold for 2026?
The exclusion is $6 million in Ohio taxable gross receipts for 2025 and later years. Businesses at or below that amount generally owe no CAT.
What is the Ohio CAT rate?
0.26% of Ohio taxable gross receipts above the $6 million exclusion.
Is there still an annual minimum tax?
No. The annual minimum tax was eliminated starting in 2024.
I am under $6 million but still have a CAT account. What should I do?
In most cases the account should be canceled through the Ohio Business Gateway so you do not receive notices for returns you no longer owe.
Let us talk
The first conversation is free. If you are not sure where your business stands on the CAT, or you have a notice sitting on your desk, call (216) 249 6013, email info@joshkatzcpa.com, or send a message through the contact form. My office is at 3401 Enterprise Pkwy, Suite 340-387, Beachwood, OH 44122.
