![]() ![]() Below, Chart 1 provides a list of those exclusions, and the bolded exclusions will be discussed in further detail below. ![]() A full list of items excluded from the definition of gross receipts can be found in Ohio Revised Code Section 5751.01(F)(2). However, Ohio law excludes numerous items from the definition of gross receipt and therefore those items are excluded from being subject to the CAT. “Gross receipts” are broadly defined in Section 5751.01(F) of the Ohio Revised Code as “the total amount realized by a person, without deduction for the cost of goods sold or expenses incurred, that contributes to the production of gross income of the person, including the fair market value of any property and any services received, and any debt transferred or forgiven as consideration.” In other words, a gross receipt is anything that contributes to a taxpayer’s gross income which includes proceeds from the sale of goods or services and income generated from rentals and leases. Then a taxpayer must situs (or source) those gross receipts to Ohio in order to calculate their total “taxable gross receipts.” A taxpayer’s total taxable gross receipts will then determine their remaining obligations under the CAT. To determine what is a “taxable gross receipt” a taxpayer must undergo a three-step analysis that starts with determining what is a “gross receipt” under Ohio law. The focus of this article will be on what is and is not a “taxable gross receipt” under the CAT. There are certain “excluded taxpayers” including any taxpayer with $150,000 or less of “taxable gross receipts”, non-profit organizations, governmental entities, and others. The CAT is measured by a taxpayer’s “taxable gross receipts” during the tax period, which for most taxpayers will be the calendar year.Īs a general rule, any individual or business entity that is required to register or pay tax under Ohio law is subject to paying Ohio’s Commercial Activity Tax. Since July 1, 2005, Ohio has imposed an annual Commercial Activity Tax (“CAT”) on taxpayers doing business in Ohio. The privilege of doing business in Ohio comes at a cost. ![]() Lewis, Esq., Attorney and Program Coordinator, OSU Income Tax Schools and Barry Ward, Leader, Production Business Management Director, OSU Income Tax Schools What are “Taxable Gross Receipts” Under Ohio’s Commercial Activity Tax?īy: Jeffrey K. ![]()
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