Ohio’s Tenth District has ruled in favor of plaintiffs Ohio Grocers Association that the provisions of the commercial activity tax (CAT) related to imposition of a percent tax on annual gross receipts greater than $1 million applied against gross receipts generated from the wholesale sale of food and from the retail sale of food for human consumption off premises, is in violation of the Ohio Constitution.
The court held that despite statutory language claiming otherwise, the CAT tax in actual application is a transactional excise tax stating “Though the CAT purports not to be a transactional tax, in its operation when applied to gross receipts, a transactional tax is in essence what it becomes.”