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Ohio Supreme Court holds CAT’s bright-line presence nexus standard satisfies Commerce Clause

On Nov. 17, 2016, the Ohio Supreme Court held that the bright-line presence nexus standard that applies to the commercial activity tax (CAT) satisfies the substantial nexus requirement under the Commerce Clause of the U.S. Constitution. The business challenging the imposition of the CAT, an out-of-state retailer that did not have a physical presence in the state, had nexus with Ohio because its annual gross receipts in Ohio exceeded the $500,000 statutory threshold.