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Do I need to include my PPP loan or HHS Provider Relief funds when calculating OH CAT?

Question: Do I need to include my Payroll Protection Program (“PPP”) loan or HHS Provider Relief funds when calculating Ohio Commercial Activity Tax (CAT)?

Answer from Jennifer Bryant, Healthcare and Accounting Services Team:

Many Ohio businesses received funding from both the Payroll Protection Program and the HHS Provider Relief Funds that were part of the CARES Act, the sweeping legislation designed to infuse the American economy with much needed liquidity. As these businesses file their Commercial Activity Tax (CAT) returns, it is important to understand how the State of Ohio is treating the receipt of these funds.

Ohio specifically addresses the HHS Provider Relief funds, stating that these funds are not excluded from a taxpayer’s gross receipts for purposes of the CAT. But, there is an exception. If the healthcare provider is a nonprofit organization (as that term is defined in Ohio Administrative Code 5703-29-10), that nonprofit organization is excluded, and therefore not subject to CAT.

In regard to the PPP funds, the Ohio General Assembly modified the definition of “gross receipts” to specifically exclude all forgiven PPP loans from Ohio CAT. Those forgiven PPP loans have been excluded from federal gross income under §1106(i) of the CARES Act. In other words, forgiven PPP loan principal will be excluded from the tax base for federal income tax purposes and Ohio Commercial Activity Tax. 

Should your organization have any questions regarding this issue, please reach out to your GJM advisory team for help.

(Jennifer picture)

Jennifer Bryant is a supervisor in the firm’s healthcare department. She came on board with Gilmore Jasion Mahler in January of 2002. A member of the firm’s Healthcare and Accounting Services Team, she works closely with clients to ensure that their healthcare practices run smoothly, handling monthly financials and often fielding questions and offering guidance on a variety of client issues. Jennifer’s areas of expertise include ambulatory surgery centers, physician practices and dental practices.    

A graduate of Davis College, Jennifer is a member of the Ohio Society of Certified Public Accountants (OSCPA).

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.