Ohio LLC: to file, no annual report, and the CAT to understand

The short version

Filing facts at a glance

Item	Value
LLC filing fee	$99 (Articles of Organization, Form 610)
Corporation filing fee	$99 (Articles of Incorporation)
Annual report fee	$0 — no annual report required for domestic LLCs
Filing office	Ohio Secretary of State, Business Services Division
Online filing	Yes — ohiosos.gov/businesses
Processing time	3–7 business days; 2-day expedite $100, same-day $200, 1-hour $300
Registered agent (statutory agent)	Required; physical Ohio address
Corporate income tax	None — Ohio eliminated its corporate franchise tax in 2014
Commercial Activity Tax (CAT)	0.26% of Ohio gross receipts above the exclusion
CAT exclusion (2024+)	$3 million in taxable gross receipts
Individual income tax	0% / 2.75% / 3.5% (graduated, 2024 reform lowered top rate)

The Commercial Activity Tax, in plain terms

Ohio's CAT is not an income tax. It is a tax on gross receipts — revenue, before any cost of goods, payroll, rent, or other deductions. Economically this is a much heavier tax per dollar of profit than a standard corporate income tax, because it hits businesses with thin margins (distribution, retail, wholesale) disproportionately. A 0.26% CAT on a 4% operating margin business is, effectively, a 6.5% tax on operating income.

What changed in 2024

Before 2024, the CAT applied to any business with over $150,000 in Ohio taxable gross receipts, with a $150 minimum annual fee. This pulled in huge numbers of small businesses.

The 2023 Ohio budget bill (House Bill 33) dramatically raised the exclusion:

• 2024: first $3 million in taxable gross receipts exempt.
• 2025 onward: first $6 million in taxable gross receipts exempt.
• Minimum tax: eliminated. No more $150 floor.

For most small Ohio businesses, this means the CAT is now effectively zero. A single-founder consulting LLC grossing $400,000 from Ohio clients pays $0 in CAT. A bootstrapped SaaS company with $2M ARR from Ohio customers pays $0 in CAT.

Where the CAT still bites

• Distribution and wholesale businesses with Ohio revenue above $3M (rising to $6M in 2025).
• Retailers and restaurant chains with multiple Ohio locations.
• Any out-of-state business with significant Ohio customer sales — the CAT has an economic nexus threshold ($500,000 in Ohio receipts, regardless of physical presence), and out-of-state businesses hitting the threshold owe the tax even though they have no office in the state.
• Franchised operations with Ohio-sourced royalty streams.

The CAT is why Ohio, despite having a zero corporate income tax and no LLC annual report, is not a pure tax haven — it is a state with a revenue model aimed at large-volume businesses, funded by a broad-based gross-receipts tax, not by income tax. If you are that large-volume business, factor the CAT into your decision.

Why Ohio otherwise looks attractive

• No LLC annual report. File once, pay $99, and the Secretary of State does not invoice you again unless you file an amendment. Ohio is one of only a handful of states (Ohio, Arizona, Alabama in certain years, Missouri for LLCs) with no recurring state filing requirement. Over a ten-year entity life, this is a $500–$2,000 saving versus most other states.
• No corporate income tax. Ohio eliminated its corporate franchise tax in 2014, one of the first states to fully repeal. C-corps operating in Ohio owe the CAT but not a state corporate income tax.
• Modernized Secretary of State portal. Ohio's business services site has online filing, real-time entity search, and a well-maintained fee schedule. Good execution.
• Individual income tax trending down. The 2023 budget bill cut the top individual rate from 3.75% to 3.5% and zeroed out the bottom brackets. Passthrough LLC income to an Ohio-resident member is taxed at the owner's individual rate, now moderate.

How to file an Ohio LLC, step by step

1. Pick a name. Must contain "Limited Liability Company," "LLC," or "L.L.C." Search the Ohio business filings portal.
2. Appoint a statutory agent (Ohio's term for registered agent). Physical Ohio address required. Can be an individual or a commercial agent.
3. File Form 610, Articles of Organization. Online via the SOS portal. Fee: $99. Required: name, statutory agent, effective date, whether member-managed or manager-managed (optional).
4. Draft an operating agreement. Not filed with the state; required by banks and sound practice. Ohio's Revised Code Chapter 1706 (the modernized LLC Act adopted 2021) gives operating agreements strong contractual force.
5. Get an EIN from the IRS. Free, online.
6. Check federal BOI status. Check FinCEN BOI current status — a March 2025 interim rule exempted U.S.-formed entities, though rules have been litigated. File only if required for your entity type.
7. Register with the Ohio Department of Taxation via the Ohio Business Gateway for: sales and use tax if you sell taxable goods, employer withholding if you hire, and CAT registration if your Ohio gross receipts will exceed $150,000 (still the registration threshold even though the tax threshold is higher).
8. Register with the Ohio Bureau of Workers' Compensation if you hire employees. BWC is a state-monopoly system — no private workers' comp market in Ohio.
9. File municipal returns where you operate. Ohio has city-level income taxes (RITA and CCA jurisdictions) that are separate from state tax. This is the hidden compliance cost most new founders miss.

Ongoing compliance

• No state annual report. The Ohio Secretary of State will not invoice you yearly.
• State income tax return. Form IT-1040 for individual passthrough owners, IT-4708 or IT-1140 for composite/passthrough entity-level filings.
• CAT return if registered — annual if gross receipts $150,000–$1M, quarterly if over $1M. Annual return due May 10.
• Sales tax returns if registered — monthly or semi-annual depending on volume.
• Municipal income tax returns. The big one. Most Ohio cities have a 2–2.5% income tax on business income earned in that city. RITA handles 300+ cities; CCA handles Cleveland and several others; Columbus and Cincinnati run their own collections. You will file separate returns for every city where you have nexus.
• BWC premium annually based on payroll.
• Federal BOI updates within 30 days of ownership changes.

When Ohio is the right call

• You live or operate in Ohio. Cincinnati, Columbus, Cleveland, Akron, Dayton, Toledo — there is no reason to foreign-qualify when the home-state filing is $99 with no recurring fee.
• You want a low-cost, low-maintenance LLC and your revenue will stay under the $3M / $6M CAT exclusion. The combination of $99 filing, no annual report, no corporate income tax, and a CAT that does not apply at your scale is genuinely attractive.
• You are forming a passive holding LLC with no Ohio operations and no Ohio member. You pay the $99 once, maintain a statutory agent, and the state leaves you alone.

When to look elsewhere

• High-volume, low-margin Ohio business. Distribution, wholesale, retail chains: the CAT hits your gross receipts, and the economic effect on operating margin is material. Model it carefully, and consider whether a different operating structure (sub-entity segregation by activity) reduces CAT exposure.
• Municipal tax sensitivity. Ohio's municipal income tax system is one of the most fragmented in the country. If you will operate across many cities, plan for the compliance burden.
• Privacy. Ohio filings list the statutory agent's name and address and the effective date, but can be member-managed without listing members. Some privacy is possible, but Wyoming and New Mexico are stronger fits.
• Venture-backed startup. Delaware C-corp remains standard.

The bottom line

Ohio is a best-in-class low-maintenance state for small operating LLCs: cheap to form, nothing to file each year, no corporate income tax, no LLC franchise tax. The Commercial Activity Tax is the one big asterisk — it hits gross receipts, not income, and with the 2024 reform it now only affects businesses over $3M in Ohio-sourced revenue. If you are under that threshold and living in Ohio, the state formation cost-benefit is as good as it gets east of the Mississippi. Above the threshold, price in the CAT like any other cost of doing business and decide accordingly.

See related guides on our States index.