Information Release

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 premises. 

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.