In a decision announced on Nov. 22, 2022, the Ohio Supreme Court ruled that the sale of NASCAR’s broadcast rights and other intellectual property rights are not subject to the Ohio commercial activity tax. The decision overturns an Ohio Board of Tax Appeals decision and tax assessment that sourced more than $186 million of revenue to Ohio. The decision establishes a meaningful precedent for how the sale and licensing of intellectual property rights can be taxed in Ohio moving forward.
“We are pleased with the Ohio Supreme Court’s precedent-setting decision and its confirmation that Ohio law protects content creators like NASCAR from overreaching taxation,” said Taft partner Jeremy Hayden. “The Court made it clear that taxes should not apply simply because intellectual property can be viewed on a screen or purchased from a shelf in the state. We would also like to thank the Ohio Chamber of Commerce for their support in this case. NASCAR will not hesitate to challenge any similar taxation in the future,” he added.
Taft acts as Ohio outside tax counsel for NASCAR on state and local tax matters. The Cincinnati-based Taft team was led by partner Hayden and included associate Christopher Tassone and partner Aaron Herzig. Hayden advises clients on matters relating to corporate law, mergers and acquisitions, and state and local tax law. He chairs Taft’s State and Local Tax practice. Tassone counsels businesses on a wide range of tax issues including audit support, incentives, transactional planning, and tax litigation. Herzig is a leader of Taft’s Appellate Practice. He briefs and argues appeals in federal and state courts, and counsels clients regarding complex federal practice and appellate matters.