Ohio Supreme Court puts brakes on bid to tax NASCAR

The Ohio Supreme Court put the brakes on the state’s attempts to tax NASCAR for fans watching races and buying licensed merchandise here.

The Ohio Tax Commissioner initially ordered NASCAR to pay the state nearly $550,000 in back taxes from 2005 to 2010 and penalties.

It argued NASCAR owed commercial activity tax for broadcast revenue, licensing fees and merchandise sold in Ohio ranging from flags and barbeque sets to fuzzy dice.

The Ohio Supreme Court disagreed, ruling unanimously that NASCAR’S $1.6 billion, multiyear contract with FOX Broadcasting Co. to air its races nationwide didn’t mention Ohio.

“By its plain terms, the CAT applies to the right to use intellectual property only to the extent that receipts are ‘based on’ the right to use the property in Ohio,” wrote Ohio Supreme Court

Justice Pat Dewine in the court’s opinion. “The sample contract plainly does not base what NASCAR is paid on the right to use NASCAR’S property in Ohio.”

NASCAR maintained that the Florida-based company should pay its taxes there.

The court split 4-3 on whether Ohio could tax licensing fees that NASCAR gives to banks, insurance companies and other companies.

The majority ruled that Ohio couldn’t but three Democratic justices disagreed.