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Court of Appeals of Ohio, Tenth Appellate District, Franklin County
February 7, 2019, Rendered
(REGULAR CALENDAR) [**1062]
[*P1] Appellant, Greenscapes Home and Garden Products, Inc., appeals from a decision issued by the Ohio Board of Tax Appeals ("BTA") affirming the assessment of the commercial-activity tax ("CAT") by appellee, Joseph W. Testa, tax commissioner, for revenue Greenscapes receives from the sale of lawn and garden products that are shipped into the state of Ohio. For the reasons that follow, we affirm.
I. Factual and Procedural Background
[*P2] Greenscapes is a Georgia corporation. It does not have any locations in Ohio [**1063] and does not employ any agents, representatives, or employees in Ohio. Greenscapes' primary customers are "big-box" retailers such as Walmart, Home Depot, and Lowe's. These retailers have distribution centers located in Ohio. When an order is placed, Greenscapes is provided with a delivery address. [***2] It prepares a bill of lading but is not responsible for shipping. The retailer arranges for a carrier to pick up the product at Greenscapes' facility. Once loaded into the carrier's truck, the product becomes the property of the retailer. After the product leaves the facility, Greenscapes cannot track the final destination of the product. In this case, we are concerned with the situsing of the total gross receipts that Greenscapes receives when it sells goods that are shipped by the retailer to Ohio.
[*P3] In April 2012, an auditor for the Ohio Department of Taxation sent Greenscapes a nexus letter. The letter stated that it appeared that Greenscapes was doing business in Ohio but had not registered or filed for the CAT. It requested that Greenscapes take one of three actions: (1) register, file, and remit any taxes owed; (2) provide information if already registered and filed; or (3) explain why the company should not be required to register for the CAT. In response, Greenscapes registered for the CAT in May 2012 and filed returns for all quarters of 2011 and 2012.
[*P4] Greenscapes also received notice in 2012 that a CAT audit was to be conducted. After initially complying and sending some sales [***3] information, Greenscapes declined to further participate in the audit. It also stopped filing CAT reports and paying any taxes to Ohio. The auditor used the sales information provided to determine the total gross receipts for 2007-2012 and estimated the total gross receipts for 2005 and 2006. In February 2014, a notice of assessment was issued to Greenscapes in the amount of $64,064 for taxes owed for the period of 2005-2012, plus interest, penalty, and late payment penalty. The department also issued notices of assessment for each quarter of 2013 and 2014 based upon estimated tax owed due to Greenscapes' failure to file a return.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2019-Ohio-384 *; 129 N.E.3d 1060 **; 2019 Ohio App. LEXIS 404 ***; 2019 WL 480201
Greenscapes Home and Garden Products, Inc., Appellant-Appellant, v. Joseph W. Testa, Tax Commissioner of Ohio, Appellee-Appellee.
Subsequent History: Discretionary appeal not allowed by Greenscapes Home & Garden Prods. v. Testa, 156 Ohio St. 3d 1406, 2019-Ohio-2261, 2019 Ohio LEXIS 1215 (Ohio, June 12, 2019)
Prior History: [***1] APPEAL from the Ohio Board of Tax Appeals. (BTA No. 2016-350).
Greenscapes Home & Garden Prods. v. Testa, 2017 Ohio Tax LEXIS 1810 (Ohio B.T.A., July 19, 2017)
Disposition: Judgment affirmed.
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Tax Law, State & Local Taxes, Administration & Procedure, Administration & Procedure, Judicial Review, Civil Procedure, Appeals, Notice of Appeal, Standards of Review, De Novo Review, Constitutional Law, The Judiciary, Case or Controversy, Constitutionality of Legislation, Sales Taxes, Sales Tax Definitions, Congressional Duties & Powers, Commerce Clause, Dormant Commerce Clause, Imposition of Tax, Fundamental Rights, Procedural Due Process, Scope of Protection, Sales Taxes, Bill of Rights, Procedural Due Process