Less than 30 percent of businesses anticipated to register for Ohio’s
new corporate activity tax program had actually registered for the tax a week
after the registration deadline passed.
When Ohio rolled out its new Commercial Activity Tax – dubbed CAT – as
part of a tax package to simplify the state’s tax code July 1, a Nov. 15
registration deadline was set.
The Akron Beacon Journal reported state officials had estimated that between 350,000 and 400,000
businesses would register by the Nov. 15 deadline. Only about 93,000 had
actually registered as of the deadline.
“We are not panicking at this point,” Gary
Gudmundson, communications director for the department of taxation told the Beacon Journal. “Our experience with other
taxes is that people wait until the last minute. Clearly that is a factor
Delinquent registrations face a $100 per month penalty for each month
after the deadline that passes. The penalty tops out at $1,000.
The Commercial Activity Tax is being phased in during
the next five years while two other business taxes – the corporation franchise
and tangible personal property taxes – are being phased out for most
businesses, according to a Ohio Department of Taxation press release on the
Ohio-based companies with more than $150,000 in
taxable gross receipts in a calendar year and out-of-state companies doing
business in Ohio must register for the tax under provisions of the state’s most
recent two-year budget bill that took effect July 1.
An Ohio Department of Taxation spokesman confirmed that gross receipts
will be determined based off Ohio IFTA miles. So, whatever percentage a trucker
or company runs in Ohio will be calculated against the total gross receipts.
For example, if a trucker grosses $300,000 in a year and runs half of his or
her miles in Ohio, the tax will be levied against $150,000 – which be a minimum
fee of $75 this year and $150 a year starting in 2006.
The first return is due Feb.10, 2006.
Truckers with CAT questions are encouraged to visit tax.ohio.gov or call