(A) Pursuant to
division (I) of section
5751.01 of the Revised Code, a
person is deemed to have "bright-line presence" in this state for purposes of
the commercial activity tax if the person meets one of the five tests listed in
that section, one being that the person has property in this state with an
aggregate value of at least fifty thousand dollars at any time during the
calendar year. This rule is to address the application of the property test to
highway transportation services.
(B) For purposes of paragraph (A) of this
rule, a person providing highway transportation services will be presumed to
have at least fifty thousand dollars of property in the aggregate during the
calendar year if the person has property of such value in this state for more
than thirteen days, which need not be consecutive.
(C) For purposes of paragraph (B) of this
rule, "day" means a calendar day or any portion thereof. Multiple trips during
the same day do not constitute more than one day.
(D)
(1)
Persons providing highway transportation services must situs gross receipts
from such services pursuant to division (G) of section
5751.033 of the Revised Code in
proportion to the miles traveled by the carrier during the tax period within
the state compared with the miles traveled by the carrier during the tax period
everywhere. Even if a person has bright-line presence, however, that person
must also have at least one hundred fifty thousand dollars in taxable gross
receipts in order to be a taxpayer for purposes of the commercial activity tax.
That threshold applies to a person who would otherwise be a separate taxpayer
or to a group of persons who would otherwise be members of a combined taxpayer
group, but does not apply to members of a consolidated elected taxpayer group.
Please see rules
5703-29-02 and
5703-29-04 of the Administrative
Code for further clarification on this issue.
(2) For example, assume a widget manufacturer
located in Kansas contacts ABC trucking company (ABC), a Kansas transportation
company, to arrange the transportation of one hundred thousand dollars worth of
the manufacturer's widgets to XYZ retailer (XYZ), located in Pennsylvania. The
total trip is nine hundred miles, of which two hundred fifteen miles are
traveled in Ohio, and ABC charges the manufacturer ten thousand dollars. ABC
loads the widgets onto its trucks in Kansas and drives them through this state
to XYZ's Pennsylvania location. ABC's truck is worth eighty thousand dollars,
and this is the only trip ABC makes through this state during the calendar
year. ABC would not be deemed to have bright-line presence for purposes of the
commercial activity tax because ABC is not in this state for more than thirteen
days during a calendar year.
If, however, ABC contracted with the widget manufacturer to
make bi-weekly trips to XYZ in Pennsylvania for purposes of transporting the
widgets, and ABC drove through this state each trip, ABC would be deemed to
have bright-line presence in this state for purposes of the commercial activity
tax. It is important to remember, however, that ABC would not be considered a
taxpayer subject to the commercial activity tax until ABC has at least one
hundred fifty thousand dollars in taxable gross receipts (those gross receipts
sitused to this state) during the calendar year. If ABC is a combined taxpayer,
the entire group must add its taxable gross receipts together to determine if
the group reaches the one hundred fifty thousand dollar threshold amount.
(Please note that if ABC was a member of a consolidated elected taxpayer group,
the one hundred fifty thousand dollar threshold would not apply.) In this
example, assuming ABC meets the bright-line standard, ABC's ten thousand
dollars of gross receipts would be sitused to this state based on the
proportion of miles driven within this state compared with miles driven
everywhere.
Notes
Ohio Admin. Code
5703-29-15
Effective:
6/20/2019
Five Year Review (FYR) Dates:
4/3/2019 and
06/20/2024
Promulgated
Under: 119
Statutory Authority:
5703.05
Rule
Amplifies: 5751.01(I)
Prior Effective Dates:
08/11/2006
