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15. Are the Ohio Franchise and CAT deductible for Maine corporate income tax purposes?

The Ohio Franchise Tax is being phased out in favor of the Ohio Commercial Activity Tax (CAT). Under the Ohio Franchise Tax, taxpayers compute the tax on both net worth and net income, paying on the base that produces the higher tax. This tax is either a value tax, or an income tax - depending on the outcome of the computation. Therefore, the Ohio Franchise Tax based on net worth is deductible for Maine corporate income tax purposes to the extent deducted for federal corporate income tax purposes. The Ohio Franchise Tax based on income must be added back to federal taxable income when computing Maine taxable income.

The Ohio CAT is an annual privilege tax measured by the gross receipts on business activities in the state. Because the CAT tax is a gross receipts tax, it is deductible for Maine corporate income tax purposes to the extent deducted for federal corporate income tax purposes.

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