![]() ![]() For Ohio, it can be illustrated as follows. Tax pyramiding not only obscures the real tax burden, but it also incentivizes businesses to move investment out of the state or to vertically integrate. In addition to Ohio, only Delaware and Oregon levy an individual income tax in addition to a GRT.Īll GRTs share the same fundamental issue with tax pyramiding. Ohio does collect more of its own sourced revenue from the CAT than both Delaware, Nevada, Tennessee, and Texas do from their GRTs (both Delaware and Tennessee levy a corporate income tax on top of the GRT). Other than Oregon, every other state attempts to account for the disparate treatment this kind of tax has on different industries by levying a multitude of different rates depending on the business type. Census Bureau, Author calculationsĪs visible in Table 1, Ohio has the simplest GRT of the seven currently levied at a state level. ![]() Source: State Department of Revenues, U.S. Table 1: Gross Receipt Taxes in America State The other states that still levy gross receipt taxes are Delaware, Nevada, Oregon, Tennessee, Texas, and Washington. They were once common, but now largely have been repealed. These taxes are uniquely uncompetitive, discourage investment in the state, and drive inefficient business decisions divorced from economic merit. Ohio’s CAT, implemented in 2005 as part of tax reform that lowered and consolidated business taxes, is one of only a few gross receipts taxes still levied in the country. House Bill 234 would phase out the tax over five years. A group of lawmakers in Ohio have proposed to repeal the state’s gross receipt tax (GRT), also known as the commercial activity tax (CAT). ![]()
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