Individuals are limited to deducting $10,000 ($5,000 for married filing separate) of state and local taxes (SALT) on their Federal income tax. Generally, income earned by pass-through entities (PTE) is taxed at the investor level, meaning business owners lose a valuable Federal income tax deduction for state taxes paid on income passing through from businesses... Read More
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In a recent Board of Tax Appeals Case, taxpayers contested the Department’s assessment of personal income taxes for 2014-16, asserting that they were not Ohio residents. See Anthony R. Joy & Robin E. Miller, (et. Al.), v. Jeffrey A. Mcclain, Ohio BTA Case No. 2020-239. However, the taxpayers made two critical mistakes that ultimately resulted in... Read More
In our previous post, we explained the Ohio Department of Taxation proposed a regulation change to limit a taxpayer’s ability to make a retroactive consolidated filing election for Ohio Commercial Activity Tax purposes (CAT). The rule change is in response to a BTA decision where a taxpayer was permitted to make a retroactive consolidated filing... Read More
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
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
Retaining experienced counsel with knowledge of not only proper procedure but how to present a case is critical to prevailing at the Board of Tax Appeals (BTA). Recently, the BTA denied the taxpayer’s claim for a business income deduction in part because supporting evidence was attached to the notice of appeal, not properly presented at... Read More
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
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
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
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