Companies who have received Paycheck Protection Program (PPP) loans through the CARES Act may be wondering how to treat the loan and potential forgiveness amounts for Ohio Commercial Activity Tax (CAT) purposes. The amount of the company’s PPP loan and any amount of the loan that is forgiven under the CARES Act is excluded from a taxpayer’s gross receipts for purposes of the CAT.

Per the Ohio Department of Taxation’s FAQ section: “The principal amount received by a person on account of any transaction properly characterized as a loan to a person is excluded from gross receipts under R.C. 5751.01(F)(2)(e). Additionally, forgiven debt is generally included in gross receipts for CAT. However, uncodified section 36 of Am. Sub. H.B. 481 of the 133rd General Assembly excludes from gross receipts amounts of forgiven indebtedness excluded from a taxpayer’s gross income for federal income tax purposes pursuant to section 1106(i) of the CARES Act.”

If you have questions about how the Paycheck Protection Program will affect your business, please contact your BMF Advisor.

About the Authors

Mark A. Rossetti
CMI
Senior Manager, State and Local Tax Services

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