The Ohio Supreme Court recently heard oral arguments in three cases that could test the constitutionality of the Ohio commercial activity tax (CAT). These cases turn on whether the CAT’s “bright-line” nexus standard violates the dormant Commerce Clause of the United States Constitution. The Ohio Department of Taxation argues, among other things, that the taxpayers’ “virtual” presence in Ohio satisfies substantial nexus as required by the dormant Commerce Clause. If decided on the merits, these cases may have far-reaching consequences for online sellers of goods and services.
In their article for Law360, Sutherland attorneys Jeffrey Friedman and Chris Mehrmann discuss the three cases and review the potential arguments that states will use in both defending factor-based nexus standards and asserting jurisdiction over remote retailers.
View the full article, published by Law60 on May 6, 2016.