Ohio CAT – Ohio Supreme Court holds sale of intangible contract rights sitused outside Ohio

Ohio Commercial Activity Tax – Ohio Supreme Court applies market-based sourcing and grants taxpayer refund by situsing intangible revenue to purchaser’s physical locations.  Situsing gross receipts often becomes a contentious issue in Ohio Commercial Activity Tax (CAT) audits partially due to the lack of guidance applying Ohio’s market-based sourcing statute. The Ohio Supreme Court has... Read More

OSBA Sales & Use Tax Subcommittee Report Highlights Recent Cases

Click here to view the Sales & Use Tax Subcommittee Report that Steve and Rich presented to the Ohio State Bar Association’s Taxation Law Committee on September 24, 2020. The OSBA Sales/Use Tax Subcommittee Report discusses recent developments concerning the scope of taxable services, as well as the federal preemption of taxation on internet services which... Read More

Ohio clarifies SBA Economic Injury Disaster Loan (EIDL) grants are taxable gross receipts for CAT Purposes

In a previous post, we noted that forgiven Paycheck Protection Program (PPP) loan amounts are excluded from Ohio’s commercial activity tax (CAT) to provide taxpayer relief during the COVID-19 pandemic. H.B. 481. However, the Ohio Department of Taxation has indicated this relief does not extend to EIDL advance grants and other county-issued relief grants. Recently,... Read More

Ohio bills seek to repeal law giving cities flexibility for remote worker withholdings

In the wake of the Covid-19 pandemic, the Ohio General Assembly passed H.B. 197 to provide tax relief to Ohio citizens through deadline extensions and flexible tax policy. One provision gave employers flexibility to withhold income taxes as if employees were still working at the office, even if they were working remotely in a different... Read More

Sales Tax Collection: Broad Marketplace Facilitator Laws Could Capture Unwary Taxpayers

Most states have recently passed laws requiring marketplace facilitator to collect tax on e-commerce sales by remote sellers made through the marketplace’s platform. Ohio, for example, broadly defines a marketplace facilitator as any entity that operates a marketplace and facilitates payment processes for goods or services. R.C. 5741.01(W). This definitions covers the usual suspects, such... Read More

Marketplace facilitators making interstate sales collect Ohio sales tax based upon the consumer’s destination

Sourcing sales is critical to determine the appropriate jurisdiction and tax rate for Ohio sales tax collection purposes. Recently, the Ohio Department of Taxation revised Information Release ST 2009-03 to reflect that sales facilitated by “marketplace facilitators” are sourced to the destination of the sale – i.e., the location where the consumer receives the tangible... Read More

PPP loan forgiveness will not result in increased Ohio commercial activity taxes

To provide some taxpayer relief in the wake of COVID-19, Ohio is excluding forgiven PPP loan amounts from Ohio’s commercial activity tax (CAT). While generally debt forgiveness is treated as taxable gross receipts for CAT purposes under R.C. 5751.01(F), forgiven PPP loans will be specifically excluded under recently passed H.B. 481. The Ohio General Assembly... Read More

Ohio sales tax no longer to be imposed on internet access services due to federal restrictions.

Beginning July 1, 2020, federal law will permanently prohibit state sales tax on internet access services under the Internet Tax Freedom Act (ITFA). Although Ohio was amongst seven states previously exempt from the federal prohibition, these states cannot tax internet access charges starting July 1, 2020. Ohio will continue to impose sales tax on automatic... Read More