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Court Takes Up Tax On Out-Of-State Companies' Online Sales

Ohio Supreme Court Gavel statue

A fight over whether Ohio can impose business taxes on companies that do millions of dollars of business in the state but have no stores or buildings on the ground has reached the state's Supreme Court.

Justices are slated to hear arguments Tuesday in the cases of three out-of-state e-commerce companies, including California-based Newegg Inc., the largest U.S. online retailer after Amazon.
Ohio began charging the companies commercial activity taxes in 2005, after audits determined Ohio sales. The companies have refused to pay.
The businesses argue Ohio is violating the U.S. Constitution's commerce clause that allows only the federal government to regulate interstate commerce. 
Ohio counters that software connections and interactions with Ohio customers are enough to establish a taxable tie.