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Many Ohio producers need to be aware of important tax deadline
By Steve Bartels
Ohio Farm News

The Butler Soil and Water Conservation District conducted a very nice annual meeting at Lake Lindsay on October 20. At that meeting, Michael Egbert, Butler County Farm Bureau president, asked me if I was going to do anything on the Commercial Activity Tax (CAT). This is a new tax for Ohio business including farms. The farmer sitting next to me, who I believe would be required to file because of his gross sales, didn’t know what Michael was talking about, so more information needs to be out there.

According to Don Breece, farm management specialist, Ohio State University Extension, farmers with gross sales of more than $150,000 join other commercial businesses subject to the new Ohio tax (CAT) which came into being as a result of this year’s Ohio Budget Bill. In a question to the Ohio Department of Taxation, whether farms were included, the reply was as follows: “The CAT was intended as a broad-based, low rate privilege tax. As such, it applies to farmers and other agricultural enterprises, once these entities reach $150,000 in taxable gross receipts.”

A second question was asked about milk and other livestock sales from Ohio farms to out-of-state markets. Would these sales be a part of the gross income figure and subject to the tax? The answer was that “the gross receipt has to be sitused to Ohio. If the dairy farm milk is sold outside Ohio, the farm is not subject to CAT. See the Ohio Revised Code 5751.033 for situsing provision.”

For businesses with gross receipts below $150,000, no CAT is due, Breece noted. For businesses with receipts between $150,000 and $1 million, a flat $150 tax will be paid. A tax rate schedule will kick in for businesses with gross receipts more than $1 million.

All businesses with receipts of more than $150,000 per year must pay a one-time registration fee. Twenty dollars will cover most farms (a $200 maximum fee). Registration deadline is November 15 and online registration is encouraged (a reduced $15 is charged for web registration). A web link is available to explain more about the CAT and other new Ohio tax information at: http://tax.ohio.gov/

It is very important to register, even if you later determine that you may not be subject to the tax, since a penalty may be imposed at $100 per month, up to $1,000, for failure to timely register.

Published in the November 9, 2005 issue of Farm World.

11/9/2005