- Agency
- Ohio Department of Taxation, through the Ohio Business Gateway or a paper update form
- Paperwork
- A cancellation of the commercial activity tax account, using the online transaction or the Business Account Update Form
- The clock
- Do it when the sale closes, since an open account can keep requiring returns even if you owe little or no tax
Watch for: Assuming that selling the company ends the account. Unless you cancel, you must keep filing returns, even when your receipts are below the threshold.
What the CAT is
The commercial activity tax, called the CAT, is a tax on gross receipts that Ohio businesses register for and file through the Ohio Business Gateway.
Rules and thresholds have changed in recent years, so the right filing depends on the year and on your receipts.
Why selling does not end it
The state treats you as a registered taxpayer until you ask it to cancel. If you skip the step, the department can keep expecting returns, even if your business no longer exists in your hands.
Ways to cancel
The department describes several routes. You can use the cancel account transaction on the Ohio Business Gateway, check a cancellation box on your final return, or submit the Business Account Update Form.
The update form has a reason for cancellation that covers a business that was sold or merged. It asks for the buyer's name, address, federal tax number and CAT number, along with the effective date of the sale.
Get the details from the buyer
Because the form asks for buyer information, collect it before closing. Put a line in the sale agreement saying the buyer will supply its tax numbers.
Final return and timing
Your final return should cover receipts through the sale date. Ask your CPA whether the year of sale has a filing, even a minimum one, that cannot be skipped. Deadlines and thresholds differ by year, so check the department's current guidance.
What if you already stopped filing
Some owners stop filing after a sale and assume the matter is closed. Contact the department or your CPA to see where the account stands, because missing returns can add penalties and notices that are easier to resolve early than late.
A CPA can usually sort out the open periods in one visit and file the cancellation at the same time, which gives you a clean record to show the buyer's lender if it asks.
Items for the sale agreement
- Who cancels the account and by what date
- The buyer's tax numbers for the form
- Who answers a notice about a period before closing
Related steps
City taxes are separate, as explained in Cleveland net profit tax account closing. If your company is an LLC, read dissolving it after the sale. For deal terms, see letters of intent, then request a price opinion.
This page is general information and not tax or legal advice. Confirm the process and timing with your CPA, your attorney and the Ohio Department of Taxation.