Recent court rulings in Ohio have significantly reshaped how businesses must compute and report their Commercial Activity Tax (CAT) obligations. Two Ohio Supreme Court decisions clarify how taxpayers must substantiate the proper situsing of receipts from sales through Ohio distribution centers for purposes of calculating the Commercial Activity Tax (CAT).

Another ruling narrows the scope of the CAT’s tax base. In that case, the Ohio Board of Tax Appeals concluded that the CAT only applies to amounts actually realized by the taxpayer and should exclude chargebacks, rebates, or price adjustments. Together, these decisions signal a clearer and more taxpayer-favorable framework for determining CAT liability for prior and future tax years.

Download Whitepaper