United States

Ohio: Despite Title Transfer Occurring in Texas, Sales of Goods Were Sitused to Ohio

May 14, 2018
From KPMG TaxWatch

Loading the player...

Recently, the Ohio Board of Tax Appeals addressed whether a Texas-based clothing manufacturer was subject to Commercial Activity Tax or CAT. This determination depended on whether the taxpayer had over $500,000 of receipts sitused to Ohio so that it met the state’s bright-line economic nexus test. Under Ohio law, gross receipts from the sale of tangible personal property are sitused to Ohio if the property is received in Ohio by the purchaser. The taxpayer argued that because title to the clothing and risk of loss passed to buyers at its warehouse in Texas and it received payment in Texas, none of its receipts should be sitused to Ohio and therefore it lacked substantial nexus with the state.

The Board disagreed. In an earlier case, the Ohio Supreme Court had held that goods received by purchasers in Ohio, but subsequently transported outside of the state, were not sitused to Ohio for corporate franchise tax purposes. Applying this holding to the substantially similar CAT situsing rule, the Board observed that its inquiry was into the ultimate destination of the goods sold. Because the invoices for the sales at issue identified an Ohio “ship to” address, the Board held that those receipts were properly sitused to Ohio, despite the title transfer occurring in Texas. Please contact Dave Perry at 513-763-2402 with questions on SKM Industries, Ltd. V. Testa.


For more information about TWIST or to view archived episodes, please visit our TWIST homepage.

 Subscribe to TWIST via iTunes, or  Subscribe via RSS.

To receive TWIST e-mails each Monday morning, make sure that state, local and indirect is checked off as one of your topics of interest on the KPMG TaxWatch registration site.


The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.