The Sept. 17 Ohio Supreme Court decision to uphold the commercial activities tax (CAT) may benefit the state’s coffers, but it is continued punch to businesses in Ohio at large and specifically closer to home.

The Ohio Supreme Court protected, 6-to-1, a tax that brings in an estimated $180 million each year. That’s a lot of money at stake and a lot of cost that is being passed on to consumers.

In the four years since the state has collected the tax from grocery stores, based on their gross receipts, grocers have insisted it is an unconstitutional food tax. The state claims the CAT is a franchise fee collected for the honor of doing business in Ohio.

The state can call it whatever it wants, but the Ohio Grocers Association (OGA) knows it is a food tax, an excise tax, as dissenter Justice Paul Pfeifer noted.

Walt Churchill, who operates two local grocery stores, has been very outspoken against the tax.

“Taxing food is a way for the government to try to cover spending. To them, it is a wonderful way to get more money,” he said Sept. 23. “It is supposed to be against the law to tax food taken home for consumption. The government needs to start looking inward, to start cutting expenses. They have a lot of questionable costs; why should we be another avenue to collect money for overspending?”

OGA Chairman Dave Marconi issued this statement: “I, like most of you, was very disappointed that the Ohio Supreme Court did not recognize the constitutional argument that was being made on behalf of all Ohioans who purchase food for off-premise consumption. The State argued that the CAT is not a tax on food, but rather a tax on the privilege of doing business in Ohio. I would argue that the CAT is part of the reason that so many businesses are leaving Ohio. It is hard for me to find the privilege in this equation.”

The continuation of the CAT puts many businesses on the wrong side of an equation that benefits the spending budget at the expense of food on the average family’s table.

Thomas F. Pounds is president and publisher of Toledo Free Press. Contact him at tpounds@toledofreepress.com.

Tags: CAT tax

This entry was posted on Friday, September 25th, 2009 at 12:00 am and is filed under Opinion, Publisher's Statement.
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