Ohio Court Upholds Economic Nexus Standard


On November 17, 2016, the Ohio Supreme Court issued three decisions in which it held that remote sellers with no physical presence in the state were nevertheless subject to Ohio’s commercial activity tax (CAT). OMA counsel, Mark Engel, Bricker & Eckler, provides this short summary of the case, which OMA considers a win. Engel wrote that the court “… rejected the taxpayers’ arguments that the federal commerce clause required a physical presence in order to impose a tax for the privilege of doing business in the state and held that the substantial nexus requirement under the dormant federal commerce clause jurisprudence was satisfied by the substantial sales made by the taxpayers into the Ohio market.” This is one to keep an eye on as the taxpayers will have 90 days from the date the court issues its mandate to decide whether to seek a discretionary review by the U.S. Supreme Court.  11/22/2016