Ohio’s New CAT Rules

Ohio’s Corporate Activity Tax (CAT) — a broad-based tax, which imposes a low rate (0.26%) across several industries — was established under the 2005 tax reform law. By replacing the former franchise tax and tangible personal property tax, both which imposed a disproportionate burden on manufacturers, the CAT has helped Ohio’s manufacturing competitiveness.

But changes are underway following the recent enactment of the new biennium budget (House Bill 33). The Ohio Department of Taxation has released this summary.

Under the new rules, the CAT will be more dependent on larger manufacturers for revenue, posing a long-term threat to the manufacturing community when the next economic downturn hits and policymakers search for additional revenue. 8/22/2023