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Gross Receipts Tax in Ohio: Complete Guide 2026

Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.

Ohio’s Commercial Activity Tax (CAT) is a gross receipts tax imposed on the privilege of doing business in the state. Unlike income taxes, which are based on profit, the CAT is levied on total taxable gross receipts — meaning it applies even to businesses that are not profitable. Ohio enacted the CAT in ~2005 as a replacement for both its corporate franchise tax and the tangible personal property tax on business equipment and inventory. Recent legislation has significantly restructured the CAT, raising the exemption threshold and converting from a quarterly to an annual filing system, making it essential for Ohio businesses to understand the current rules.

Ohio Commercial Activity Tax Rates (2026)

Gross Receipts Level	Tax Treatment
~$150,000 or less	No CAT owed (exempt)
Over ~$150,000	~0.26% of taxable gross receipts over ~$1,000,000
Annual minimum tax	~$0 for receipts at or below the exclusion threshold

Note: Ohio restructured the CAT effective ~2024, phasing in a higher exemption threshold and eliminating the tiered minimum tax system that previously applied to businesses with gross receipts between ~$150,000 and ~$1,000,000. Under the new structure, businesses with gross receipts above ~$150,000 but at or below ~$1,000,000 may still have filing obligations but owe no tax. Businesses with gross receipts above ~$1,000,000 pay ~0.26% on the amount exceeding ~$1,000,000. Verify current thresholds with the Ohio Department of Taxation.

How the Ohio CAT Works

Who Must Pay

The CAT applies to any person or entity with taxable gross receipts from Ohio-sourced activities, including:

Corporations (C-corps and S-corps)
LLCs and partnerships
Sole proprietorships
Out-of-state businesses with Ohio nexus (including economic nexus based on ~$500,000 in Ohio receipts)

The tax applies regardless of entity type, organizational form, or profitability.

Defining Taxable Gross Receipts

Taxable gross receipts include all amounts received from transactions in Ohio, including:

Sales of goods or products sitused to Ohio
Sales of services performed in or for the benefit of Ohio customers
Rental income from Ohio property
Royalties and licensing fees from Ohio sources

Excluded from gross receipts are certain items such as proceeds from the sale of an entire business, tax refunds, receipts from casual sales, and intercompany transactions between members of a consolidated elected taxpayer (CET) group.

Situsing Rules

Ohio uses “situsing” rules to determine whether a receipt is from Ohio. For tangible goods, the situs is the delivery location. For services, the situs is where the purchaser receives the benefit. For rentals, the situs is the location of the property. These rules determine whether out-of-state businesses have Ohio CAT obligations.

Consolidated Elected Taxpayer (CET) Groups

Related entities may elect to file as a CET group, which allows them to exclude intercompany transactions from gross receipts. This can significantly reduce the CAT base for corporate groups with multiple Ohio entities that transact with each other.

Filing Requirements

Requirement	Detail
Filing frequency	Annual (effective ~2024; previously quarterly)
Filing deadline	May ~10 for calendar-year filers
Estimated payments	Quarterly estimated payments required if annual CAT exceeds ~$200
Filing method	Electronic filing through the Ohio Business Gateway

Comparison to Other Gross Receipts and Business Taxes

State	Tax Type	Rate	Base	Exemption
Ohio	Commercial Activity Tax	~0.26%	Gross receipts over ~$1,000,000	First ~$150,000 exempt
Washington	B&O Tax	~0.138%—~3.30% (varies by class)	Gross receipts	None (small business credit)
Texas	Franchise (margin) tax	~0.375%—~0.75%	Revenue minus deductions	~$2,470,000 no-tax-due
Nevada	Commerce tax	~0.051%—~0.331%	Gross revenue over ~$4,000,000	First ~$4,000,000 exempt
Oregon	Corporate Activity Tax	~0.57%	Gross receipts over ~$1,000,000	First ~$1,000,000 excluded

Ohio’s ~0.26% rate is lower than many other gross receipts taxes but applies to total revenue rather than profit, which can create meaningful tax liability for low-margin businesses.

Tips for Minimizing Ohio CAT Liability

Review situsing rules carefully. Ensuring that receipts are properly sitused to the correct state can prevent over-reporting Ohio gross receipts. Deliveries to out-of-state customers are not Ohio-sourced.
Elect consolidated taxpayer (CET) status. If your business has multiple Ohio entities that transact with each other, electing CET status can eliminate intercompany receipts from the CAT base.
Exclude non-taxable receipts. Certain categories of receipts (proceeds from selling an entire business, tax refunds, casual sales) are excluded. Review all exclusions annually.
Monitor the ~$150,000 threshold. Businesses with gross receipts at or below ~$150,000 owe no CAT. If your business is near this threshold, review revenue recognition timing.
File estimated payments on time. Quarterly estimated payments are due if annual CAT exceeds ~$200. Underpayment triggers interest from the quarterly due dates.
Understand the impact on low-margin businesses. Because the CAT is based on revenue, not profit, businesses with thin margins pay tax regardless of profitability. Factor the CAT into pricing and operational decisions.
Keep records of all exclusions and adjustments. Ohio may audit CAT filings. Maintain detailed documentation supporting all excluded receipts and situsing determinations.

Key Takeaways

Ohio’s Commercial Activity Tax (CAT) is a gross receipts tax of ~0.26% on taxable gross receipts exceeding approximately ~$1,000,000
Businesses with Ohio gross receipts at or below approximately ~$150,000 are exempt from the CAT
The CAT applies to all entity types (corporations, LLCs, partnerships, sole proprietors) and regardless of profitability
Recent restructuring converted the CAT from quarterly to annual filing and raised the small business exemption threshold
Consolidated elected taxpayer (CET) groups can exclude intercompany transactions from gross receipts
The CAT can disproportionately affect low-margin businesses because it taxes revenue, not profit

Next Steps

See the full state picture at Taxes in Ohio: State Tax Guide 2026
Compare business taxes at State Income Tax Rates Comparison 2026
Learn about federal business tax at Federal Income Tax Guide 2026
Calculate your federal bracket with the Tax Bracket Calculator 2026
Get local help: Find a CPA Near You