What on Earth is CAT Tax?
If you’re a small business owner in Ohio, you’ve probably heard whispers about the Commercial Activity Tax (CAT). It’s a tax on gross receipts—essentially, the state’s way of saying, “Congrats on making money, now share some with us.”
Sounds simple, right? Wrong. The CAT tax process is notoriously vague, leaving many businesses scratching their heads. What counts? What doesn’t? And why does the threshold keep changing like Ohio weather?
The Confusion: Why Businesses Trip Over CAT
Intro: our new client. When we started working with a new client in Q2 of 2023, CAT tax came up fast. At first glance, their reported sales looked like they exceeded the threshold. But here’s the kicker: most of their sales were out-of-state, which don’t qualify for CAT tax.
To make matters more interesting, Ohio was in the middle of raising thresholds:
- 2023: $1M threshold (with a $150 flat fee for those under it)
- 2024: $3M threshold
- 2025: $6M threshold
Translation? Our client didn’t owe CAT tax at all. Yet, they had already paid—and overpaid—by a whopping $20,000.
The Plot Twist: Over-Reporting and Refund Drama
Our team discovered the issue quickly, but fixing it? That was a marathon. Ohio makes it easier to apply for a credit than a refund, so the process became a paperwork Olympics.
BudgetEase’s Bookkeeping Hero recalculated past CAT filings, matched numbers down to the penny, and provided detailed documentation for multiple years. Our first filing was rejected (ouch), so we doubled down, digging through spreadsheets and accounting histories like forensic accountants on a mission.
Finally, after months of persistence and a respectful pushback to the Ohio Department of Taxation, the refund was approved. Victory! Our client got their money back—and a crash course in why outsourcing accounting services to a detail-obsessed team matters.
Why This Matters for Your Business
CAT tax isn’t the only curveball Ohio throws at small businesses and nonprofits. From QuickBooks catch-up to unraveling messy ledgers, these challenges can eat up your time and sanity. That’s where a reliable bookkeeping service like BudgetEase steps in.
If you’re tired of tax headaches and bookkeeping chaos, let us help. We’re all about numbers, serious about accuracy, and relentless when it comes to saving you money.
Contact BudgetEase today—because spreadsheets don’t fight back, but we do.
