The Ohio Board of Tax Appeals found that banking software was subject to sales tax in Cincinnati Federal Savings & Loan v. McClain, Case No. 2018-2247 (December 22, 2020). The banks purchased software for their online banking system. After initially paying tax on the purchases, the banks filed refund claims, claiming that the software
Ohio
Ohio Supreme Court Rejects Look-Through Sourcing for Sale of Customer Contracts
By Scott Wright & Alla Raykin on
Posted in In the News
The Ohio Supreme Court held that under the Commercial Activity Tax (“CAT”), Defender Security Company’s (“Taxpayer”) gross receipts from selling alarm monitoring service contracts to ADT Security Services, Inc. (“ADT”) should be sourced to the location where ADT itself receives the benefit from purchasing these contracts, rather than the location of the ultimate consumer of…
Ohio Updates Sourcing Guidance for Marketplace Facilitators
By Jonathan Feldman & Charles Capouet on
Posted in Marketplace, Policy and Legislation
Late last month, the Ohio Department of Taxation updated its existing sourcing bulletin to provide that marketplace facilitator sales into the state are sourced for sales and use tax purposes at the location where a consumer receives an order or service. The change allows marketplace facilitators to apply the same destination-based sourcing rules to both…
First Things First: Cincinnati Billboard Tax Does Not Violate First Amendment
By Charles Capouet & Jeffrey Friedman on
Posted in Noteworthy Cases
On June 18, 2020, the Ohio Court of Appeals held that Cincinnati’s excise tax on the gross receipts generated by billboards does not violate the First Amendment to the United States Constitution. The court found persuasive Clear Channel Outdoor, Inc. v. Director, Department of Finance of Baltimore, 223 A.3d 1050 (Md. Ct. Spec. App.…
Cleveland Gets Personal Taxing Nonresident Retiree’s Stock Options
By Chelsea Marmor & Charlie Kearns on
Posted in Domicile and Residency, Noteworthy Cases
The Ohio Board of Tax Appeals (BTA) affirmed the Cleveland Board of Income Tax Review’s (Board) decision that it properly denied a refund claim of municipal income tax paid on income from stock options that a nonresident was granted while working in the city but exercised after she retired and moved to Florida. Willacy v.
Federal Treatment Not “Controlling” but “Persuasive”: Ohio Board of Tax Appeals Holds CAT Inapplicable to Three Types of Finance Company Receipts
By Dennis Jansen & Daniel Schlueter on
Posted in In the News, Noteworthy Cases
On February 6, 2020, the Ohio Board of Tax Appeals held that a captive automobile financing company was not subject to commercial activity tax (CAT) on receipts that it earned in connection with three types of revenue streams:
- receipts from sales of retired leased vehicles,
- receipts from securitization transactions, and
- interest subvention payments.
Background:…
Ohio NBA Owner Wants Only the Net Taxed
By Peter Hull & Jonathan Feldman on
Posted in In the News, Income
The owner of an NBA arena is appealing an Ohio commercial activity tax (CAT) determination arguing that gross receipts from ticket sales of third-party events hosted at the arena are not attributable to the owner. When the arena was not being used by the Cleveland Cavaliers, the owner rented the facility to third-parties who host…
Ohio BTA Rules Communications Cabling Installation Exempt from Sales Tax
By Justin Brown & Todd Lard on
Posted in In the News
On October 22, 2019, the Ohio Board of Tax Appeals (BTA) held that an insurance company was entitled to a refund of sales tax paid on its purchase of CAT-5 and CAT-6 communication cabling for internet and Voice over Internet Protocol (“VoIP”) installed in its headquarters office building. The company purchased the cabling as part…
Ohio is Seeing Green: CAT Imposed on Out-of-State Seller’s Sales That Were Completed Out of State
By Justin Stone & Jeffrey Friedman on
Posted in In the News
The Court of Appeals of Ohio held that a Georgia-based wholesaler of lawn and garden products established nexus and its sales were properly included in the Commercial Activity Tax (CAT) base.
The taxpayer was a wholesaler of garden equipment that did not have property, employees or other presence in Ohio. The Taxpayer’s primary customers were…
US Supreme Court’s Ruling Bolsters Taxpayers’ First Amendment Right To Pass Through Fees (and Taxes)
Posted on
Posted in New York, Policy and Legislation
A recent US Supreme Court decision on surcharges strengthened taxpayers’ First Amendment rights when deciding how they present pass-through fees and taxes to their customers.
- The Supreme Court held that a New York statute prohibiting a seller from imposing a credit surcharge was a speech regulation, subject to heightened scrutiny, because it regulates how retailers
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