In the state of Ohio, many changes have been made to the tax structure concerning businesses. This will affect you if you own a business in Ohio, or if you are thinking of starting one up. So I would like to give you a brief overview of the Ohio small business tax laws.

Ohio tax reform caused the elimination of a tangible personal property tax on general businesses. So, in order to replace that revenue, lawmakers created a new tax called the commercial activity tax, or CAT. This new tax is an annual amount based on the net gross receipts of your business activities within the state of Ohio. The state says that the CAT will not unfairly burden businesses, whether small or large, because it is a low rate (0.26 percent of gross receipts) with limited tax credits (four) and it has a broad base (it covers both corporations and small businesses).

The CAT took effect on July 1, 2005, but it is going to be phased in at about 20 percent per year until April 1, 2009.

In the meantime, the corporate franchise tax, or CFT, which was based on a corporation’s net income, has become a revenue source that is full of loopholes. These loopholes made it a tax that became difficult to collect, plus it had a high top marginal rate. So this tax is being phased out by 20 percent per year, just as the CAT is being phased in. it will be eliminated by 2009.

If you are going to collect sales tax in the state of  Ohio, you must remit it to the state on a quarterly basis. the sales tax rate is currently 5.5 percent, with food, newspapers, magazine subscriptions, telephone service, and prescription drugs exempt. For more information on Ohio small business tax laws, please check back with our website or phone 1-800-848-1300.

Last 10 posts by Molly

• New York Small Business Tax Laws - December 5th, 2006
• North Carolina Small Business Tax Laws - December 5th, 2006
• North Dakota Small Business Tax Laws - December 5th, 2006
• Oklahoma Small Business Tax Laws - December 5th, 2006
• Oregon Small Business Tax Laws - December 5th, 2006
• Pennsylvania Small Business Tax Laws - December 5th, 2006
• Rhode Island Small Business Tax Laws - December 5th, 2006
• South Carolina Small Business Tax Laws - December 5th, 2006
• South Dakota Small Business Tax Laws - December 5th, 2006
• Tennessee Small Business Tax Laws - December 5th, 2006

This entry was posted on Tuesday, December 5th, 2006 at 4:13 pm and is filed under Small Business Tax Laws, Tax Laws. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.