Ohio Administrative Code › Title 5703 - Department of Taxation › Chapter 5703-29 - Commercial Activity Tax › Section 5703-29-15 - Highway transportation services - bright-line presence and situsing

Current through all regulations passed and filed through July 1, 2024
(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.