L.L. Bean Taxed by New Ohio Law

Apparel, outdoor gear and home goods cataloger L.L. Bean appears to be the test case regarding a new Ohio tax law.

The state is telling Freeport, ME-based L.L. Bean that it must pay about $210,000 relative to Ohio’s new tax law known as commercial activity tax (CAT). The CAT law was enacted in 2005, but not fully phased in until March 2009. And now it seems Ohio law enforcement officials are eager to pounce.

A spokesman for Ohio Department of Taxation told The Columbus Dispatch that Bean was the first case of this kind for the state. Ohio Tax Commissioner Richard Levin reportedly sent L.L. Bean a letter dated Aug. 10 that details the amount owed.

The Direct Marketing Association has told its members that the Ohio CAT imposes an aggressive nexus (physical presence) standard known as a “bright line.” Under this standard, a taxpayer is deemed to have nexus if at any time during the year it has any of the following: $500,000 of taxable gross receipts; $50,000 worth of Ohio property; $50,000 of Ohio payroll or other compensation for services in the state; at least 25% of its total property, payroll, or gross receipts in Ohio; or is domiciled in Ohio.

Continues at:  L.L. Bean Taxed by New Ohio Law.