Ohio lesson 5 of 6
Ohio LLC taxes, the CAT, and a vendor's licence
Ohio has no LLC franchise tax and no corporate income tax on pass-through LLCs, but there are two other things to plan for: the Commercial Activity Tax and, if you sell taxable goods or services, a vendor's licence.
The Commercial Activity Tax
The CAT is a tax on Ohio-sourced taxable gross receipts, not on profit. For 2025 and later years the exclusion amount is $6,000,000: LLCs with taxable gross receipts at or under that figure owe no CAT and do not need to file a CAT return. The exclusion has moved before, from $1,000,000 in 2023 to $3,000,000 in 2024 to $6,000,000 in 2025, so confirm the figure for the year you are filing on the Department of Taxation's site rather than relying on a fixed number.
Above the exclusion, receipts are taxed at 0.26 percent on the amount over the threshold, and registration with the Department of Taxation is required.
Personal income tax on LLC profit
Ohio LLC profit passes through to the members' personal Ohio income tax returns unless the LLC elects corporate treatment. Some Ohio cities, including Columbus, Cleveland and Cincinnati, also levy their own municipal income tax, which applies on top of the state tax if the LLC or its members have a taxable presence there.
Vendor's licence
If you sell tangible personal property or taxable services at retail in Ohio, you need a vendor's licence from the Department of Taxation before making sales. As of April 9, 2025 the fee for a new vendor's licence application is $50, up from the previous $25.
The vendor's licence is separate from CAT registration. You can owe no CAT and still be required to hold a vendor's licence if you sell taxable goods.
Key takeaways
- The CAT exclusion is $6,000,000 of taxable gross receipts for 2025 and later; always confirm the current figure.
- LLC profit passes through to members' Ohio and, in some cities, municipal income tax.
- A vendor's licence, currently a $50 application fee, is required to sell taxable goods or services.
Frequently asked questions
Does every Ohio LLC have to register for the Commercial Activity Tax?
No. Registration is generally required once taxable gross receipts exceed the current exclusion amount, which is $6,000,000 for 2025 and later. Confirm the current-year threshold with the Department of Taxation.
Is the vendor's licence the same as a business licence?
No. It specifically authorizes retail sales of taxable goods or services. Ohio has no general statewide business licence.
Official sources
Or let us file your Ohio LLC for you
Everything above is yours to use for free. If you would rather hand it over, we prepare and file the Articles of Organization (Form 610), act as your registered agent, and track your ongoing deadlines.
Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team