Gross Receipts:
Ohio CAT Refunds Allowed on Receipts from Goods Ultimately Destined for Out-of-State Shipment
Case No. 2019-1233, Ohio BTA (9/13/23). In a case involving a global manufacturer of oleochemicals and personal care products that contract manufactures bar soap, antiperspirant and similar items at its out-of-state plant, the Ohio Board of Tax Appeals (BTA) held that the company successfully showed that delivery for such products to its largest customer ultimately occurred outside Ohio and thus its receipts from these transactions may be sourced outside Ohio for state commercial activity tax (CAT) purposes. Under the provided facts, the BTA noted that the company’s use of an Ohio distribution center owned by a third-party only temporarily houses soaps destined for the entire Eastern United States and it would be wrong under state law to situs all those receipts to Ohio “simply because Ohio is the first stop.” For most of the receipts derived from the company’s largest customer, the BTA held that the taxpayer successfully showed ultimate delivery occurred outside Ohio and thus granted some of the company’s underlying claimed CAT refunds. Concurring and dissenting opinions follow. Please contact us with any questions.
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