The Ohio Board of Tax Appeals (BTA) found L.L. Bean, Inc. to be subject to Ohio commercial activity tax (CAT) because it had greater than $500,000 of Ohio gross receipts from catalog and Internet sales, even though it lacked an Ohio physical presence. L.L. Bean, Inc. v. Levin, BTA Case No. 2010-2853 (March 6, 2014).Read More
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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 AprilRead More
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
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 maintainingRead More
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
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 theRead More
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 leastRead More
The Ohio Department of Taxation (the “Department”) is focused on increasing registration and compliance with the commercial activity tax (the “CAT”), which replaced Ohio’s corporate franchise, personal property and personal income taxes (although the final phase-out of the personal income tax has been delayed). As part of the Department’s addition of 100 revenue generating employees,Read More
The Ohio Grocers Association sought a declaratory judgment that the Commercial Activity Tax (CAT) violated Ohio’s constitutional prohibition against excise taxes levied or collected upon the sale or purchase of food for off-site consumption. Commencing in 2005, Ohio’s tax landscape changed substantially by phasing out the personal property and corporate franchise taxes, while phasing in the CAT. Essentially, theRead More
