On March 15, 2022, the Ohio Supreme Court determined that the Ohio Board of Tax Appeals (BTA) must apply the true object test when determining whether a bank purchased nontaxable custom software or taxable services. The taxpayer was a bank that purchased computerized services which allowed the bank to run transactions on a daily basis and maintain all of the bank’s accounting and financial records. The BTA found that while the software was somewhat customized, it was not fully customized and was thus taxable. In reaching that conclusion, the BTA said that the taxpayer had the burden to prove that the software was exempt custom software. The Supreme Court rejected the BTA’s interpretation that the taxpayer had the burden of proving the exemption here, stating that a transaction is taxable only when the true object is to obtain the work performed by the computer system, but not where the true object is obtaining personal and professional services that are coupled with work that the computer system performs. Thus, the Supreme Court remanded the case to BTA to apply a true object test to determine whether the software is taxable in Ohio.