Ohio CAT: BTA Predictably Upholds Ohio’s Bright-Line Nexus Standard in Two Cases Despite Lack of Physical Presence

BDB-Best-Lawyers

The Ohio BTA has released two nearly identical opinions upholding commercial activity tax (CAT) assessments on retailers lacking an Ohio physical presence. In Newegg Inc. v. Testa, Ohio BTA, No. 2012-234 (2/26/2015) and Crutchfield, Inc. v. Testa, Ohio BTA, No. 2012-926, 2012-3068, and 2013-2021 (2/26/2015), the retailers met the bright-line presence standard by having more than $500,000 in Ohio taxable gross receipts. R.C. 5751.01(I). These cases are now the lead cases in the CAT bright-line nexus dispute, replacing L.L. Bean, Inc. v. Levin, Ohio BTA, No. 2010-2853 (3/6/2014) which has been settled. Information about the L.L. Bean case can be found here.

Both taxpayers, Newegg, Inc. and Crutchfield, Inc., are remote retailers that sell products to customers across the United States, including in Ohio. Each taxpayer contends it lacks substantial nexus with Ohio since it does not own or lease property in Ohio, and exclusively sold its products online and via catalog. Since the taxpayers met the statutory bright-line nexus standard, and the BTA lacks jurisdiction to determine constitutional challenges, the BTA was obligated to uphold the Tax Commissioner’s assessments. The determination as to whether the $500,000 gross receipts standard violates the Constitution must be determined by the Ohio Supreme Court, where both companies are expected to file appeals. The BTA’s purpose in these cases was simply to create the factual record for the Supreme Court to consider in its determination.

Even if the CAT can be imposed on businesses without an Ohio physical presence, questions still remain, such as whether the business must take affirmative acts to develop the Ohio market, or is merely making sales into the state sufficient. Stay tuned as the Ohio Supreme Court’s ruling on this issue will be much more important. On March 6, 2015, Crutchfield filed a notice of appeal to the Ohio Supreme Court. Yesterday, March 24, 2015, the Court referred the case to mediation. If you have any questions about your CAT obligations, please contact Steve Dimengo, Rich Fry, or Casey Davis.

Contact us.

Share This:

In the world of mergers and acquisitions (M&A), due diligence is the all-encompassing and critical process of evaluating [...]

Steve Dimengo and Rich Fry will present at the Tax Club of Cleveland meeting on October 28th, 2025 [...]

Cleveland, OH – September 18, 2025 – Buckingham, Doolittle & Burroughs, LLC is pleased to announce that Patrick [...]

Schedule Your Consultation

The First Step is Starting the Conversation

Name(Required)
This field is hidden when viewing the form
This field is hidden when viewing the form

Buckingham, Doolittle & Burroughs, LLC is a preeminent business law firm in Northeast Ohio with offices in Akron, Canton and Cleveland.

3800 Embassy Parkway, Suite 300
Akron, OH 44333

4277 Munson Street NW, Canton, OH 44718

1375 East 9th Street, Suite 1700
Cleveland, OH 44114

© 2025 All Rights Reserved | Buckingham, Doolittle & Burroughs, LLC