Ohio Commercial Activity Tax

Ohio Commercial Activity Tax Bright-line Nexus Constitutional-What to do now?

The Ohio Supreme Court recently held that the bright-line presence nexus standard for Ohio Commercial Activity Tax (“CAT”) does not violate the U.S. Constitution. Many taxpayers have pending audits or appeals at the Board of Tax Appeals regarding this nexus issue. What should these and other CAT taxpayers do now? First, it is expected the... Read More

Ohio Supreme Court upholds bright-line nexus standard for Commercial Activity Tax; Remote vendors subject to Ohio tax even if lacking physical presence.

In a 5-2 decision, the Ohio Supreme Court found that the $500,000 gross receipts in Ohio standard for creating substantial nexus for the commercial activity tax (CAT) is constitutional. “We hold that given the $500,000 sales-receipts threshold, the burdens imposed by the CAT on interstate commerce are not ‘clearly excessive’ in relation to the legitimate... Read More

Third Annual Northeast Ohio State and Local Tax Conference Provides Invaluable Updates on the Current State of Ohio and Multistate Taxes

The third annual Northeast Ohio State and Local Tax Conference was held on November 12, 2015 in Independence, Ohio. Matt Chafin, Chief Legal Counsel for the Ohio Department of Taxation, led off the Conference with an Ohio Tax Update, providing valuable insight to the Department of Taxation’s posture and recent initiatives. Chafin is the highest-ranking... Read More

Ohio Commercial Activity Tax Sourcing Rules Provide Planning Opportunities

Generally, taxable receipts for the Ohio commercial activity tax are sourced to where tangible personal property is “ultimately received” or the benefit of services are received. R.C. 5751.033. However, evidenced by guidance published by the Ohio Tax Commissioner, these locations are not always clearly discernable. O.A.C. § 5703-29-17 (sourcing services). Information Release 2005-17 (revised April... Read More

Expecting an Ohio Commercial Activity Tax (CAT) Refund?

Maybe you should… Governor Kasich recently announced a policy change that Ohio will start automatically refunding CAT overpayments reflected in tax filings before the Tax Commissioner. Previously, the state would only issue refunds to taxpayers who filed for a refund within the four-year statute of limitations, even if the state was aware of the overpayment.... Read More

Commercial Activity Tax Revenue Derived From Motor-Vehicle Fuel Sales Must Be Used For The Benefit Of Ohio’s Highway System

The Ohio Supreme Court in Beaver Excavating Co. v. Testa recently ruled that the allocations of receipts from Ohio’s commercial activity tax (CAT) derived from sales of motor vehicle fuel is unconstitutional. Pursuant to the Ohio Constitution, tax revenue derived from, or “related to,” motor-vehicle fuel sales must be used for improving, repairing or maintaining... Read More

Recent Legislation Affecting Ohio Commercial Activity Tax (CAT)

The following changes to the CAT were enacted pursuant to H.B. 508 effective September 6, 2012, except as noted below: Annual Exclusion (effective January 1, 2013): Under previous law, quarterly taxpayers were required to use $250,000 of the annual exclusion each quarter, with the unused portion thereof carried forward for up to three subsequent periods.... Read More

Ohio CAT: What is the significance of the Tax Commissioner’s L.L. Bean determination?

The Ohio Tax Commissioner’s recent Final Determination upholding the Ohio Commercial Activity Tax (Ohio CAT) assessments against L.L. Bean has received much national attention lately, but for the wrong reason. L.L. Bean’s primary argument against application of the Ohio CAT is that the bright-line nexus standard in R.C. 5751.01(H)(3) violates the Commerce Clause of the... Read More

Ohio CAT: Considerations for Combined and Consolidated Groups

Entities having “substantial nexus” with Ohio and more than 50% common ownership are required to file Ohio Commercial Activity Tax (“CAT”) returns as a combined taxpayer, unless an election to file as a consolidated group is made.  A group may elect to file CAT returns as a consolidated taxpayer if the group has at least... Read More