Ohio

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The Supreme Court of Ohio held that gross receipts from a taxpayer’s services performed out-of-state had situs with Ohio for purposes of the state’s commercial activity tax (CAT) because the benefit of the services was received in Ohio. The taxpayer provided dialysis services to patients in Ohio. To support the dialysis business, the taxpayer and…

The Ohio Board of Tax Appeals held that automobile dealers were not subject to the Ohio Commercial Activity Tax (CAT) on their sales of motor vehicles because the purchase, receipt, and delivery of the vehicles took place entirely outside of Ohio. The Department of Taxation assessed the dealers, which were located in West Virginia, for…

The Ohio Board of Tax Appeals denied an out-of-state healthcare organization’s apportionment of the Commercial Activity Tax related to healthcare services.

The taxpayer sought to apportion its gross receipts related to laboratory services and healthcare provider services based on where the taxpayer’s costs were incurred. The Board rejected the taxpayer’s position and found that the…

The taxpayer, a designer, marketer, and wholesaler of apparel, footwear, jeans, and other fashion accessories, shipped products to Ohio-based distribution centers of major retailers and paid the commercial activity tax for all items shipped to the distribution centers, even those that were ultimately received by customers outside of Ohio. The taxpayer applied for a refund…

On September 26, 2022, the Ohio Court of Common Pleas in Morsy v. Dumas, held that Cleveland’s municipal income tax on remote workers was unconstitutional on an “as applied” basis. The taxpayer lived in Pennsylvania and was employed by a company located in Cleveland, Ohio.

Prior to the COVID-19 pandemic, Morsy would stay in…

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…

The Ohio Department of Taxation recently issued an FAQ addressing the gross receipts calculation regarding remote sellers’ registration and tax remittance requirements. Following South Dakota v. Wayfair, Ohio required remote sellers to register with the Department and begin collecting sales tax if the seller had greater than $100,000 in gross receipts or at least…

The Ohio Supreme Court recently held that Cincinnati’s billboard excise tax is unconstitutional because the tax violated the First Amendment of the United States Constitution, finding that Cincinnati’s need to raise revenue by imposing the tax solely on a small number of billboard operators did not survive strict scrutiny.

In 2018, the Cincinnati City Council…