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Ohio: Challenge to imposition of the CAT on out-of-state retailers settles

The Buckeye State imposes a commercial activity tax (CAT) for the privilege of doing business in the state, as measured by a company’s gross receipts from Ohio consumers. All businesses with $500,000 or more in annual sales to Ohio consumers are subject to the CAT.

In the case Crutchfield Corp. v. Testa, internet retailers Crutchfield, Newegg, and Mason Companies all challenged the CAT under the dormant Commerce Clause doctrine and Due Process Clause of the U.S. Constitution; at issue was the collective sum of more than $200,000 in taxes, interest and penalties. Their position was that they should not be subject to the CAT because they have no physical presence in Ohio.

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