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Ohio Supreme Court offers guidance on “agency exclusion” under Ohio commercial activity tax.

One controversial issue that commonly arises in Ohio commercial activity tax (CAT) audits is whether taxpayers qualify for the so-called “agency exclusion” for gross receipts received on behalf of others. The CAT is Ohio’s entity-level tax for the privilege of doing business in the state, as measured by the taxpayer’s “taxable gross receipts” in Ohio. Some other states impose a net income tax at the entity-level, which removes expenses from the base of the tax, or have no entity-level business tax at all.

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