The September 16th, Ohio Supreme Court decision in CheckFree Servs. Corp. v. Harris has potential impact for not only CheckFree Services, but the entire payments services industry.
For CheckFree Services, it’s a meaningful win because it keeps the door open for recognition that modern payment authorization, disbursement, and related services do not fit neatly into traditional tax classifications. Moreover, their automation does not mean they are taxable.
For the payments industry, it signals that courts are increasingly willing to look beyond labels and examine the true nature and value of technology-driven services.
As financial services continue to evolve, clear and consistent tax treatment will be critical to supporting innovation, investment, and growth.
Congratulations to Steven Dimengo and Oliver Thomas, who’s tireless work on behalf of their client preserves the argument that technology enabled bill payment and disbursement authorization services are comparable to other payment authorization services already recognized as nontaxable.
Read the opinion here.