Commercial Activity Tax adopted by General Assembly
CAT, tax reductions phased in beginning July 1
The two-year state budget bill passed by the Ohio General Assembly includes a new, 0.26 percent tax on the annual gross receipts of nearly all businesses in return for elimination or reductions in several other state taxes.
Governor Bob Taft, who proposed the Commercial Activity Tax as part of a broad package of state tax law changes, is expected to sign the budget bill, House Bill 66, before the end of June.
To offset the effects of the new tax, which will be phased in over five years beginning July 1, 2005, the legislature voted to phase out the coprorate franchise tax over five years and the general business personal property tax over four years. Personal income tax rates will be cut by 21 percent over five years, beginning in tax year 2005.