"I will be out of the office on PTO." maybe. Both of your sentences work fine but would say A does more to emphasis the day and might be said "That day I will be on PTO." Personally, for just one day out of the office when coordinating a meeting schedule I think I would probably not even mention PTO and just say "That day doesn't work for me." or "I'm out of the office that day."

I think they both sound natural. The second might be the more common way you'd hear it in everyday English, though.

B is better