Ohio Tax - Manufacturers' Education Council

2011 Ohio Tax Conference
Ohio Commercial Activity Tax (CAT) Audit Experiences
Appendix A
Example O-2. Initially the taxpayer only registered MCT Sales as a separate taxpayer. Upon
audit, the Department identified that MCT, EVT and MCT Sales should have filed as a combined
group. JAT and JST did not meet the nexus requirements, so they do not need to be part of the
combined group. The taxpayer has requested that we allow a retroactive consolidated elected
group. The Department has denied the request for a retroactive consolidation, but the taxpayer is
free to change its filing at any time for future reporting purposes.
Diagram O-2.
MCT
100%
EVT JAT JST MCT Sales
Consolidated
Adding the Common Owner—Individual: the Department has instructed the auditors to
determine who the common owner is for each taxpayer group. This approach requires the auditor
to research for owners even if they are not part of the registration.
There have been numerous examples of audits where a consolidated elected group (50% or 80%)
has registered without including its individual common owner. Under audit, we determine
whether the individual meets the de minimis test ($4,500 in taxable gross receipts) and include the
individual if the individual has more than $4,500 in taxable gross receipts.
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