- Agency
- Central Collection Agency, which collects Cleveland and many nearby city income taxes
- Paperwork
- A request to close the business tax account, plus a final net profit return that notes the sale
- The clock
- Send the close request and file the final return soon after the sale date, since the account stays open until you close it
Watch for: Closing only one tax type. The close request asks which taxes apply, such as withholding, net profit or both, and an account left open can keep generating filing notices.
Why this account exists
Companies that operate in Cleveland usually file a city net profit tax return. If they have employees, they also withhold city income tax from wages.
The Central Collection Agency, often called CCA, administers those taxes for Cleveland and several other Northeast Ohio communities.
When you sell, the buyer starts a new relationship with the city, but your old account stays open until someone tells the agency to close it.
The close request
CCA publishes a form titled Request to Close Business Tax Account. It asks which tax types apply, the effective date and whether the business is still operating in a CCA community.
You can send it by mail, fax or email, and the agency lists its address on its website.
Use the date the sale closed as your effective date unless your CPA advises a different one.
The final net profit return
The net profit return has a place to show that the business was sold or stopped filing, along with the date.
When the business was sold or its activity moved to a different tax number, the return also asks for information about the buyer or the new entity.
A return counts as filed only when it is signed by the taxpayer or an authorized agent, and an extension of time to file does not extend the time to pay.
Sale year income
Gain from selling business assets can affect the final return, and how it is treated depends on the type of sale and the entity. Ask your CPA to model it before closing so the number does not surprise you.
Withholding for employees
If you withheld city tax from wages, you will usually owe the last deposits and returns for your final payroll. Closing the account before those are filed leads to notices later.
What to put in the sale agreement
- Who files the final city returns and by what date
- Whether any part of the price is held until the accounts close
- Who answers a city notice about periods before the sale
Related steps
The state side is covered in Ohio CAT account cancellation. If your company is an LLC, see dissolving it after the sale. For the price side, read add backs buyers accept.
Companies in other cities should ask which agency handles their local tax, because not every Northeast Ohio city uses CCA. To learn what your company might sell for, request a price opinion.
This page is general information and not tax or legal advice. Confirm the steps and dates with your CPA, your attorney and the Central Collection Agency.