What is the franchise tax phase-out?
For most taxpayer’s the franchise tax will ratably phase out over the five franchise tax years 2006 through 2010 (taxable years ending 2005 through 2009). During this same period Ohio’s new commercial activity tax (CAT) will ratably phase in for most franchise taxpayers. For those taxpayers subject to the franchise tax phase-out, the phase-out applies to the 2006 report even if the taxpayer’s taxable year ended prior to the June 30, 2005 effective date of the new law. For report years 2006, 2007, 2008, 2009 and 2010 franchise taxpayers subject to the phase-out must pay 80%, 60%, 40%, 20% and 0%, respectively, of the franchise tax after nonrefundable credits that they would otherwise pay were it not for the phase-out. However, the Ohio Revised Code section 5733.0611 credit for taxes paid by a qualifying pass-through entity is not subject to the phase-out factor.
For most taxpayer’s the franchise tax will ratably phase out over the five franchise tax years 2006 through 2010 (taxable years ending 2005 through 2009). During this same period Ohio’s new commercial activity tax (CAT) will ratably phase in for most franchise taxpayers. For those taxpayers subject to the franchise tax phase-out, the phase-out applies to the 2006 report even if the taxpayer’s taxable year ended prior to the June 30, 2005 effective date of the new law. For report years 2006, 2007, 2008, 2009 and 2010 franchise taxpayers subject to the phase-out must pay 80%, 60%, 40%, 20% and 0%, respectively, of the franchise tax after nonrefundable credits that they would otherwise pay were it not for the phase-out. However, the Ohio Revised Code section 5733.0611 credit for taxes paid by a qualifying pass-through entity is not subject to the phase-out factor. Please refer to the question regarding how the phase-out affects the nonrefundable credit for taxes paid by a qualifying pass-
For most taxpayers the franchise tax will ratably phase out over the five franchise tax years 2006 through 2010 (taxable years ending 2005 through 2009). During this same period Ohio’s new commercial activity tax (CAT) will ratably phase in for most franchise taxpayers. For those taxpayers subject to the franchise tax phase-out, the phase-out applies to the 2006 report even if the taxpayer’s taxable year ended prior to the June 30, 2005 effective date of the new law. For report years 2006, 2007, 2008, 2009 and 2010 franchise taxpayers subject to the phase-out must pay 80 percent, 60 percent, 40 percent, 20 percent and 0 percent, respectively, of the franchise tax after nonrefundable credits that they would otherwise pay were it not for the phase-out. However, the Ohio Revised Code section 5733.0611 credit for taxes paid by a qualifying pass-through entity is not subject to the phase-out factor. Please refer to the question regarding how the phase-out affects the nonrefundable credit fo
