Ohio Supreme Court Upholds Denial of Tax Refund for Goods Shipped Out of State

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The Ohio Supreme Court has upheld the denial of a tax refund claim by Jones Apparel Group/Nine West Holdings for Commercial Activity Taxes (CAT) paid on goods that were sold to a customer with a distribution center in Ohio, but ultimately shipped outside the state. The court ruled that the company failed to provide sufficient quantitative evidence to prove the amount of goods shipped out of state and eligible for a refund.

Why it matters

This case underscores the importance for businesses operating in Ohio to carefully track and document sales data for goods shipped to the state but ultimately sold elsewhere. Proper recordkeeping is crucial to avoid being taxed twice on the same transactions across state lines.

The details

Jones Apparel Group/Nine West Holdings filed a refund claim with the Ohio Tax Commissioner for CAT paid on goods sold to a customer with a distribution center in Columbus, but shipped outside the state. The Ohio Supreme Court upheld the denial of the refund, ruling that the company did not provide enough quantitative evidence to prove the specific amount of goods that were shipped out of state and therefore exempt from the CAT.

• On January 14, 2026, the Ohio Supreme Court issued its ruling.
• The original refund claim was filed with the Ohio Tax Commissioner.

What’s next

Businesses in Ohio will need to closely track sales data and maintain detailed records to support any future claims for CAT refunds on goods shipped out of state.