Recent Ohio Tax Changes Affect Dealerships
Updates on Ohio House Bills 66 and 33
Two pieces of legislation signed into law—Ohio House Bills 33 and 66—both contain tax changes relevant to motor vehicle dealers. Here’s a quick overview of those changes.
House Bill 66
Effective May 1, 2023, Documentary Fees are not subject to Ohio Sales Tax. Accordingly, doc fees should be removed from the sales price for purposes of determining the amount of sales tax to collect from the customer.
House Bill 33
While HB 33 primarily functions as the state budget, the bill has two substantial tax provisions impacting Ohio dealers.
Commercial Activity Tax (CAT) reduction
Currently, dealers are subject to CAT on a dealership’s gross receipts in excess of $1M, plus a scaled annual minimum tax (AMT). HB 33 increases the receipts exclusion from $1M to $3M in 2024 and $6M in 2025 and forward. Additionally, the AMT will be eliminated.
Reduction of Personal Income Tax Rates
Prior to the passage of the bill, Ohio’s top individual tax rate was 3.99%. For 2023, the top rate drops to 3.75%. Tax years 2024 and beyond will have a maximum rate of 3.5%
Have questions, or want to discuss how this impacts you and your dealership in more detail? Please contact me and we will be able to help you understand the implications.
Dealership Experts
Kristin Krabacher is a financial strategist with Brady Ware Dealership Advisors, specializing in auto dealer profitability and tax optimization. With over 8 years of experience guiding dealership owners, Kristin excels at translating complex tax laws into clear, actionable insight. She’s helped countless clients enhance gross profit, improve compliance, and make smarter financial decisions through tailored benchmarking and audit-ready processes.