Real Estate Investors & Developers Bookkeeping in Ohio

Beyond sales tax, Ohio levies the Commercial Activity Tax (CAT) on taxable gross receipts sitused to Ohio, payable by the business, separately from and in addition to sales tax. a low rate applied to a very broad base, with a substantial annual exclusion that has been raised in recent years — which has taken many smaller businesses out of the filing requirement entirely. The consequence for your books is direct: CAT is on gross receipts, not profit, so a low-margin business can owe it in a loss-making year. Tracking Ohio-sitused receipts separately through the year is what makes the return a lookup rather than a reconstruction. It is registered and filed separately from anything the Ohio Secretary of State handles, and it accrues on revenue rather than on profit — so it is recorded as it builds, not discovered at year end.

Ohio levies a real estate transfer or deed tax at closing, on top of recording fees and title charges. Each of those gets a different treatment — some capitalize into basis, some are deductible now — and drawing that line inconsistently across years is the single most common problem we find in investor books. Getting it right at closing is far cheaper than reconstructing it later.

The Ohio statewide base rate is 5.75%. That sits mid-table nationally, with local rates layered on top and sourced to the delivery address rather than to your own location. Sourcing is where this is won or lost, and with economic nexus set at $100,000 in sales or 200 transactions, it becomes your problem the moment that threshold is crossed.

Registering to do business in Ohio runs through the Ohio Secretary of State, with tax accounts through the Ohio Department of Taxation and employer accounts through the Ohio Department of Job and Family Services. Ohio treats these as wholly independent, so being in good standing with one says nothing about the others — and the sales tax account is the one that accrues a real balance while you are not looking.