CAT 2008-02 - Commercial Activity Tax: Business as usual
after Ohio Supreme Court decision in Ohio Grocers
Association v. Levin – Issued September 2008; Revised
February 2009; Revised October 2009
This information release is provided to assist taxpayers in
understanding their commercial activity tax (“CAT”)
responsibilities after the Ohio Supreme Court decision in
Ohio Grocers Association v. Levin, Slip
Opinion No. 2009-Ohio-4872. This release is updated to
reflect the decision rendered by the Court.
On Sept. 2, 2008, the 10th District Court of Appeals issued a
decision that the CAT may not be imposed on gross receipts
derived from the sale of food for consumption off the
The Tax Commissioner, through the Attorney General’s Office,
filed a motion for a stay of the judgment so the State could
appeal the decision to the Ohio Supreme Court. The Court of
Appeals granted that motion on September 9, 2008. The State
filed a Notice of Appeal on Oct. 17, 2008, and two amici
briefs were filed simultaneously in support of jurisdiction.
The Grocers waived their opportunity to respond to the appeal
notice on Oct. 31, 2008.
The Ohio Supreme Court accepted certiorari in the case and
agreed to take the case pursuant to the discretionary appeal
on February 4, 2009. The stay of the Court of Appeals
judgment remained in effect until the Ohio Supreme
Court issued its final decision on the case.
The case was argued in front of the Ohio Supreme Court on
September 1, 2009. On September 17, 2009, the Ohio Supreme
Court issued its Opinion, which reversed the decision made by
the Tenth District Court of Appeals. In its Opinion, the
Court decided that the CAT “is not a tax on the sale or
purchase of food and therefore does not violate the Ohio
Constitution.” The Court further clarified that the CAT “is a
tax on the privilege of doing business” and the “fact that
the tax is measured by gross receipts that include proceeds
from the sale of food does not affect the constitutionality
of [the CAT].”
Pursuant to all guidance issued by the Department, taxpayers
should have continued to file all applicable returns and make
all applicable payments for the CAT. However, if a taxpayer
has not been in full compliance with this requirement, a
taxpayer should come forward to amend their returns in order
to mitigate any possible penalties.
Please direct any questions to the CAT Division of this
department at 1-888-722-8829.