Columbus Business First: High court set for CAT fight
Columbus partner Edward Bernert was quoted in the August 28, 2009, Columbus Business First article, "High Court Set for CAT Fight."
According to the article, four years after lawmakers passed sweeping reforms designed to broaden the state's tax base and lower the rates paid by businesses, the Ohio Supreme Court will soon hear arguments over whether the reform's principal component, the commercial activity tax (CAT), is an unconstitutional levy on Ohio's grocers. Hanging in the balance is the estimated $480 million an unfavorable decision could cost Ohio in lost revenue and tax refunds. At issue is whether the CAT, which requires businesses to pay a 0.26 percent tax on revenue, is in essence a sales tax, according to the article.
The issue is undoubtedly confusing, said Bernert, who is also an adjunct professor of Ohio tax law at Capital University Law School. "I have always understood that there are three kinds of taxes," Bernert said. "Ad valorem, or property tax, income tax and excise tax . . . So it's hard to understand at that level how the CAT would not be considered an excise tax." Bernert said he thinks that while there is a good chance the CAT will be upheld by the court, there is at least one justice, Paul Pfeifer, who may side with the grocers. When the court accepted the case for review in February, Pfeifer was the lone justice who voted against accepting the case.