Ohio CAT Tax Threshold Is Now $6 Million — Do You Still Owe?

The ohio cat tax threshold changed so completely in the last two years that a large share of what ranks for it is now wrong. Under current law, Ohio’s Commercial Activity Tax (CAT) has a $6,000,000 annual exclusion: the first $6 million of a business’s Ohio taxable gross receipts is not taxed at all, the rate of 0.26% applies only to receipts above that line, and there is no annual minimum tax. A business at or below $6 million generally owes nothing and does not have to register or file. Yet older guides still teach a repealed system — a $150,000 entry point and tiered minimum taxes of $150 to $2,600 — that has not existed since the end of 2023. This guide states the current rule, shows the arithmetic at three receipt levels, explains what replaced the old regime, and covers the filing and vendor’s-license basics that sit alongside the CAT.

The Ohio CAT Tax Threshold Today: $6 Million, 0.26%, No Minimum Tax

The CAT is a business privilege tax measured by Ohio gross receipts — not income, not profit. Its current structure has three parts:

• Annual exclusion: $6,000,000 for 2025 and later, including tax year 2026. Receipts at or below the exclusion are not taxed.
• Rate: 0.26% — 2.6 mills per dollar, under ORC 5751.03 — applied only to the amount above the exclusion.
• Annual minimum tax: $0. It was eliminated effective January 1, 2024. There is no minimum CAT bill under current law.

For a business at or below $6 million in Ohio receipts, the consequence is broader than a zero tax bill: it generally does not have to register for the CAT or file CAT returns at all. The main exception is a business that belongs to a combined or consolidated taxpayer group whose members’ Ohio receipts together pass $6 million — group members cannot each claim to be under the threshold on their own. You can test your own receipt level in seconds with our Ohio CAT tax calculator, which applies the $6 million exclusion and the 0.26% rate and tells you whether quarterly filing is required.

What Changed: The Pre-2024 Regime Was Repealed

Most of the wrong information in circulation describes the CAT as it existed before 2024, so it helps to see the two regimes side by side. The exclusion itself climbed in steps:

• Before 2024: annual exclusion of $1,000,000.
• 2024: annual exclusion of $3,000,000.
• 2025 and later (current law): annual exclusion of $6,000,000.

The deeper change was the annual minimum tax. Before 2024, the CAT reached businesses with as little as $150,000 in receipts and charged a tiered annual minimum tax of $150 to $2,600, on top of the rate structure — which is why so many older sources quote $150,000 as “the CAT threshold” and a minimum-tax table as if every Ohio business owed something. That regime was repealed. The annual minimum tax was eliminated effective January 1, 2024, annual filing no longer exists, and everyone who files does so quarterly. Under current law there is no minimum tax at any receipt level, and a business under the $6 million exclusion owes nothing. Any guide that quotes the $150–$2,600 tiers as current law is describing a system that no longer exists; the current figures are maintained by the Ohio Department of Taxation, which administers the CAT.

How the CAT Is Calculated

The CAT is charged on taxable gross receipts — the total receipts from business activity in Ohio — not on profit or net income. A business with thin margins and high receipts can owe CAT in a year it shows little profit, and a highly profitable business under $6 million of Ohio receipts owes none. The calculation itself has just three steps:

1. Take your Ohio gross receipts for the calendar year.
2. Subtract the $6,000,000 annual exclusion. If the result is zero or negative, stop: no tax.
3. Multiply what is left by 0.26%. Only the amount above the exclusion is ever taxed; nothing below it is.

Worked Examples: $4 Million, $7.5 Million, and $10 Million

A business with $4 million in Ohio receipts owes $0

$4,000,000 minus the $6,000,000 exclusion is below zero, so taxable gross receipts are $0 and the CAT due is $0. This business is under the threshold: no tax, and generally no CAT registration or filing either, unless it belongs to a combined or consolidated group over $6 million.

A business with $10 million in Ohio receipts owes $10,400

$10,000,000 minus the $6,000,000 exclusion leaves $4,000,000 in taxable gross receipts. At 0.26%, the tax is $4,000,000 × 0.0026 = $10,400 for the year. Note what the rate was applied to: not the $10 million of total receipts, but only the $4 million above the exclusion. Applying 0.26% to the full $10 million would produce $26,000 — a common overestimate, and wrong.

Reference points on the same formula

• Exactly $6,000,000: taxable receipts $0, tax $0.
• $7,000,000: $1,000,000 taxable, tax $2,600.
• $7,500,000: $1,500,000 taxable, tax $3,900.

Those three points make the shape of the tax clear: it is a cliff at zero only in the sense that nothing is owed below the line, but above the line the tax grows gently — $2,600 per additional million of receipts — because the rate applies to the excess alone.

Crossing the line partway through the year

The threshold is measured on the calendar year, so a growing business can cross it mid-year — and the law anticipates exactly that. Suppose a business reaches $6,500,000 in Ohio receipts partway through the year. Two things happen. First, it must register for the CAT within 30 days of passing $6 million. Second, its tax is still computed on the annual formula: $6,500,000 minus the $6,000,000 exclusion leaves $500,000 in taxable receipts, and at 0.26% the CAT is $1,300. Crossing the line does not retroactively tax the first $6 million, and it does not create a minimum-tax bill; it simply starts the quarterly filing obligation and taxes the excess. A business hovering near the line should therefore track Ohio receipts during the year rather than discovering the crossing at filing time, when the 30-day registration window has already closed.

Filing and Registration Under the Current Rules

Filing runs on a quarterly cycle; annual filing no longer exists. Quarterly CAT returns are due May 10, August 10, November 10, and February 10. The full $6 million exclusion is applied on your first quarterly return of the year, and any unused part carries forward to the later quarters of the same year — so a business whose receipts build through the year does not lose the exclusion by filing quarterly. If your receipts pass $6 million partway through the year, you must register for the CAT within 30 days of crossing it. And the group rule bears repeating: a business that is part of a combined or consolidated taxpayer group whose combined Ohio receipts exceed $6 million can be required to register and file even if its own receipts, standing alone, are below the threshold.

The Companion Question: Your Vendor’s License

The CAT is about receipts; the vendor’s license is about selling. Every Ohio retailer making taxable sales must hold a vendor’s license before the first sale, and the two obligations are independent — being under the CAT threshold does not excuse the license, and holding a license says nothing about CAT. The payload facts are simple: every Ohio vendor’s license costs a one-time $50 fee (raised from $25 on April 9, 2025), licenses never need annual renewal, and they cannot be transferred to a new owner. You will need your NAICS business activity code when you apply. The type depends on how you sell:

• County (regular) license: for selling from a fixed place of business — one license per fixed location, each with its own $50 fee, charging the sales tax rate of the county where the location sits.
• Transient license: for selling at temporary spots such as fairs, flea markets, and trade shows in counties where you have no fixed location; one license is valid statewide.
• Delivery and service licenses: for businesses whose sales are made by delivering goods to the customer’s location, or that provide taxable services on the state’s list.
• Out-of-state sellers: no vendor’s license at all — instead, a seller’s use tax account (no license fee), required once Ohio sales exceed $100,000 or 200 separate retail transactions in the current or previous calendar year.

Common CAT Mistakes Under the New Threshold

• Budgeting for a minimum tax that no longer exists. The $150–$2,600 tiered annual minimum tax was eliminated effective January 1, 2024.
• Using the old $150,000 or $1 million figures as the threshold. The current exclusion is $6,000,000 for 2025 and later.
• Applying 0.26% to total receipts. The rate applies only to receipts above the $6 million exclusion.
• Calculating on profit. The CAT is measured by gross receipts, not net income.
• Filing annually. Annual filing no longer exists; filers file quarterly, due May 10, August 10, November 10, and February 10.
• Ignoring the group rule. Members of a combined or consolidated group over $6 million in combined Ohio receipts may have to register and file even when individually under the threshold.

Frequently Asked Questions

The Bottom Line

Do you still owe the CAT? If your Ohio gross receipts are at or below $6 million, the answer under current law is no — no tax, no minimum tax, and generally no registration or filing, group membership aside. Above $6 million, you owe 0.26% on the excess only: $10,400 on $10 million of receipts, $3,900 on $7.5 million, $2,600 on $7 million. If a source tells you that you owe a $150-to-$2,600 minimum tax or that the tax starts at $150,000 of receipts, it is teaching the pre-2024 system that Ohio repealed. Work from the $6 million exclusion, file quarterly if you are over it, and register within 30 days if you cross it mid-year.

This article is general information about Ohio’s Commercial Activity Tax and vendor’s licensing and is not tax advice. CAT figures follow the Ohio Department of Taxation and ORC sections 5751.01 and 5751.03 as described in the sources used here; confirm your situation with the Department or a qualified tax professional before filing or applying.