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Ohio Supreme Court rules Ohio statute unconstitutional as applied to nonresident owner of pass-through entity

The Ohio Supreme Court held that an Ohio statute that broadly imposes income tax on capital gains realized by out-of-state investors in certain closely held pass-through entities violated the due process clause. Specifically, the statute was unconstitutional as applied to a capital gain realized by a nonresident taxpayer upon disposal of his ownership interest in a limited liability company doing business in Ohio.

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