Marketing Tax Nexus? November 2, 2005 Chris Atkins Chris Atkins You know state revenue officials are overreaching when they have to advertise a new tax to out-of-state taxpayers. Ohio’s new Commercial Activity Tax (CAT), which will replace the old franchise tax, contains an expansive definition of nexus, the minimum activities a corporation can have in Ohio before it must pay the CAT. According to the new rules, a corporation will have to pay the CAT if it makes at least $500,000 in sales to Ohio customers, even if it has not a dime of property or payroll in Ohio. To give fair warning to out-of-state taxpayers, Ohio placed an advertisement in the Wall Street Journal, warning potential taxpayers that they have until November 15 to register with the state. Ohio’s new nexus rule is a straightforward adoption of the idea of economic presence. We’ve written before about the dangers of this doctrine, and instead believe that a physical presence standard is more consistent with uniformity and simplicity. Stay informed on the tax policies impacting you. Subscribe to get insights from our trusted experts delivered straight to your inbox. Subscribe Share Tweet Share Email Topics Center for Legal Reform Ohio Business Taxes Tags Franchise Taxes Scope of State Taxing Authority State Tax and Spending Policy