| |||||||||||
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|||||
| • Your Frequent Questions • 2005 Sweeping Tax Reform in Ohio Nearly every Ohio taxpayer – both individuals and businesses – will see some tax relief as a result of a sweeping tax reform package initiated and signed into law on June 30, 2005. The tax changes are part of the biennial state budget bill that takes effect July 1, 2005. The most significant tax law changes include: Introduction of the new Commercial Activity Tax (CAT), an annual business privilege tax measured by a business’s gross receipts. The amount of taxable gross receipts determines whether or how the CAT applies. Businesses with annual gross receipts of $150,000 or less are not subject to the CAT; those with receipts from $150,001 - $1,000,000 pay a minimum of $150 tax; receipts exceeding one million dollars, when the tax is fully phased in, will be taxed at a rate of .26% (the tax rate for the first tax period from July 1, 2005 to December 31, 2005 is only .06%). Businesses subject to the CAT must register by November 15, 2005. Registration includes a one time refundable fee of $15 for registering on-line or a $20 fee for paper registration. On-line (electronic) registration is available beginning July 1, 2005 at the Ohio Business Gateway (www.obg.ohio.gov); paper applications will be available on the ODT website (www.tax.ohio.gov). Information on filing and payment of the CAT will be sent to all registered taxpayers. The first CAT returns must be filed by February 10, 2006. Also included in the tax reform package are the following: Phase out over five years of the Corporation Franchise Tax at the rate of 20% annually beginning in tax year 2006. Phase out of the Tangible Personal Property (TPP) Tax on most business’s inventory, manufacturing machinery and equipment and furniture and fixtures over four years at about 25% annually beginning in tax year 2006. Most new manufacturing machinery and equipment that would have been first taxable in tax year 2006 and thereafter will be subject to no TPP tax. The Individual Income Tax rate will be cut by 4.2% for all tax brackets for the tax year 2005 with an additional 4.2% (from 2004 rates) cut each year through 2009 for a total decrease of 21%. The State Sales Tax rate was cut from 6 to 5.5%. The vendor discount of .9% remains for timely filed and paid sales tax returns. There is an elimination of the Ten Percent Property Tax Rollback on most commercial and industrial real property. The rollback remains for residential and agricultural real property. For questions regarding CAT and other major changes, we encourage you to visit the Ohio Department of Taxation website (www.tax.ohio.gov) for information and updates or please feel free to call us. We will be providing more information as it becomes available. Donald L. Mellott, Jr. Managing Partner Mellott & Mellott provides answers to typical accounting/financial questions.
Q: What are your minimum fees?
Minimum fees for all other services will vary based on facts and circumstances.
|  |
312 Elm Street
For accounting software, and information systems expertise please visit Information Technologies Group, Ltd. at:
www.itgltd.com/itgsite/index.html |
||||||||||||||||||||||||||||||||||||
|
Hot Topics - Financial Planning/Retirement - Request for Information - Our Client Profile - Testimonials - Help Desk - Employment Opportunities - Links - Employee Links - Press Releases - All About Mellott & Mellott | ||||||||||||||||||||||||||||||||||||||