There seems to be confusion regarding revisions to the Commercial Activity Tax (CATax) minimum annual fee rate for quarterly returns due May 10th, 2014.
The CATax rate remains 0.26% on Gross Sales for the first quarter of 2014. The $1 Million annual exemption still applies and can be deducted, in its entirety in the first quarter of 2014. For example, determine your gross sales for the quarter and deduct the applicable sales tax, road tax, and excise tax to determine the “gross sales subject to the CATax” (GSSTCAT). You can then subtract $1Million from the GSSTCAT to determine the amount of net sales subject to the CATax at a rate of 0.26%.
In addition, you are required to pay a CATax minimum annual fee, based upon your 2013 Gross Annual Sales, applying a graduated fee structure. This annual fee must be included in your first quarter 2014 payment. You can use the chart below to determine the Annual Minimum Fee.
|Taxable Gross Receipts||Annual Minimum Tax||CAT|
|$1 Million or less||$150||No Additional Tax|
|More than $1 Million but less than or equal to $2 Million||$800||0.26% x (Taxable Gross Receipts – $1 Million)|
|More than $2 Million but less than or equal to $4 Million||$2,100||0.26% x (Taxable Gross Receipts – $1 Million)|
|More than $4 Million||$2,600||0.26% x (Taxable Gross Receipts – $1 Million)|
This newly revised method of calculating the CATax is separate and distinct from the soon to be implemented Petroleum Activity tax (PATax) which takes effect July 1st, 2014. But, because of this revision to the CATax structure, the benefit derived by the PATax replacing the CATax on petroleum sales is even greater than originally envisioned. The PATax and CATax are mutually exclusive.
Furthermore, these changes to the CATax affect all businesses, not just petroleum retailers.
MIRA reminds you to stay in contact with your accountant to be sure you are in compliance with these revised regulations.