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
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)
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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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No Laughing Matter: Eighth Circuit Finds that Comity and the Tax Injunction Act Bar It From Hearing an Ohio Commercial Activities Tax Dispute
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Posted in Noteworthy Cases
By Chelsea Marmor and Amy Nogid
The US Court of Appeals for the Eighth Circuit affirmed the district court and held that it lacked jurisdiction under the Tax Injunction Act and the principles of comity to “enjoin, suspend or restrain the assessment, levy or collection” of any Ohio tax where a “plain, speedy and efficient…
Ohio Supreme Court Rules that Taxing Out-of-State Investor’s Capital Gain Violates Due Process Clause
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Posted in Noteworthy Cases
By Chris Mehrmann and Leah Robinson
The Ohio Supreme Court held that the Due Process Clause of the U.S. Constitution precluded Ohio from taxing a nonresident individual on an apportioned share of his gain from the sale of a limited liability company that conducted business in the state. During the relevant time period, Ohio Rev.
Ohio Tax Litigation Reflects Evolving Nexus Landscape
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Posted in Noteworthy Cases, Policy and Legislation
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&rsquo…
Tax Base Creep: Ohio Asserts Expanded Taxability of Electronic Information Services, Internet Access
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Posted in Digital Economy, Policy and Legislation
By Zach Atkins and Madison Barnett
The Ohio Department of Taxation issued a revised information release announcing its new positions regarding sales and use tax on electronic information services used in business. In the release, the Department takes the position that taxable electronic information services can include, among other things, subscription services, inventory advertising and…
Customer Is Not Always Right in the Buckeye State: Ohio Board of Tax Appeals Holds Transcription Service Is not a Personal or Professional Service Exempt from Use Tax
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Posted in Digital Economy, Noteworthy Cases
By Nick Kump and Charlie Kearns
The Ohio Board of Tax Appeals held that medical transcription services are taxable automatic data processing services, rather than tax-exempt personal or professional services, because of the minimal level of personal skill involved in transcription services. Under Ohio law, personal or professional services are not subject to Ohio sales…
Constitutional Challenges to Ohio CAT’s Bright-Line Presence Nexus Test Advance
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Posted in Digital Economy
By Stephanie Do and Madison Barnett
The Ohio Board of Tax Appeals determined that two out-of-state online retailers with no physical presence in Ohio were subject to Ohio’s Commercial Activity Tax (CAT). The Board, declining to rule on the taxpayers’ constitutional arguments, found that the online retailers met Ohio’s statutory bright-line presence nexus test based…