U.S. Supreme Court Refuses to Hear CAT Appeal from Out of State Manufacturer


On June 12, 2017, the U.S. Supreme Court refused to entertain an appeal from the U.S. Court of Appeals for the Eighth Circuit that upheld the dismissal of an action by Diversified Ingredients, Inc. in U.S. District Court in Missouri seeking declaratory and injunctive relief against the imposition of the commercial activity tax (CAT). OMA’s tax counsel, Mark Engel, of Bricker & Eckler, wrote this brief analysis of the case and summed it up this way: “The decision does not reach the merits of whether the CAT may be imposed upon a taxpayer who does not have a physical presence in Ohio.  However, it is noteworthy for some other reasons. First, the trial and appellate courts both recognized that Ohio provides a plain, speedy and efficient remedy with respect to assessments of CAT. … Second, and in some respect more important, it reflects the willingness of federal courts to refrain from interfering with state tax matters. … Third, it represents yet another failed attempt to bring the question of economic nexus in the realm of state taxation before the Supreme Court.” All good news for the integrity of the Ohio CAT. 6/13/2017