DALLAS, Nov. 18, 2016 /PRNewswire/ -- In Crutchfield Corp. v. Testa, Slip Opinion No. 2016- Ohio-7760, issued November 17, 2016, the Ohio Supreme Court held that a taxpayer without a physical presence in the state may be required to pay the state's Commercial Activity Tax (CAT) based on the state's bright-line presence standard. Ohio's "bright-line presence" for imposing its CAT is similar to the Multistate Tax Commission's Factor Presence Standard. If a business has any one of the following in Ohio during a calendar year, the business owes the CAT at least $50,000 of property, or payroll of at least $50,000, or Ohio receipts of at least $500,000. The taxpayer, Crutchfield Corp. ("Crutchfield"), sold consumer electronics through the Internet from locations outside of Ohio and shipped its products via common carrier. Crutchfield argued that because it had no physical presence in the state, Ohio could not require it to pay the CAT. The Court held that the physical presence standard set forth in Quill Corp. v. North Dakota, 504 U.S. 298, 112 S.Ct.1904, 119 L.Ed.2d 91 (1992) did not apply to a business-privilege tax if the imposition statute ensured that the taxpayer's connection with the state was substantial. Further, the Court found that CAT's bright-line presence for imposing the tax complied with the substantial-nexus requirement set forth by the United States Supreme Court in Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 97 S.Ct. 1076, 51 L.Ed.2d 326 (1977). About RyanRyan is an award-winning global tax services firm, with the largest indirect and property tax practices in North America and the seventh largest corporate tax practice in the United States. With global headquarters in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. Ryan is a five-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 2,100 professionals and associates serves over 12,000 clients in more than 40 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at ryan.com.
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