Ohio commercial activity tax rule changes

The Ohio Department of Taxation has announced two revisions in its Commercial Activity Tax (CAT) rules, along with issuing a draft rule defining “nonprofit organizations” for CAT purposes

In a third revision, ODOT issued a release on the situsing of gross receipts from various services. The new version, CCH’s State Tax Review reported, indicates proposed situsing rules are still being developed with respect to construction contractors, contract manufacturing, directors’ fees, and transportation brokers. (See information release CAT 2005-06)

A second release was issued containing a draft of a proposed rule clarifying “common owners” for purposes of consolidated elected & combined taxpayer groups under CAT. (Release 2005-05)

Finally, in addition to a nonprofit organization’s being organized for purposes other than pecuniary gains or profit of members, directors, officers, or other private persons, ODOT has issued a draft rule adding that “the entity’s net earnings must not be distributable to those individuals, but that the payment of reasonable compensation for services rendered & the distribution of assets upon dissolution would not be considered pecuniary gain or a distribution of net earnings.’ (Release 2005-14)