NASCAR Victorious In Ohio Broadcast Tax Fight


DAYTON, OHIO — Did the state tax commissioner of Ohio properly subject broadcasts of NASCAR races in the Buckeye State to Ohio’s commercial activities tax during an audit conducted between 2005 and 2010 — a tax that requires payments on a company’s annual sales.

No. And the decision came from a Judge who happens to be the son of Ohio’s Governor.

The Ohio Supreme Court on Tuesday (11/22) ruled that the state of Ohio was wrong in its ambitions to tax the car racing body for airing its races in the state.

The problem: NASCAR is headquartered in Daytona Beach, Fla., and its broadcast revenue, licensing revenue, media revenue and sponsorship fees were wrongly subjected to the tax.

The court’s decision was divided, however, with a 4-3 decision coming from Ohio’s highest judicial body.

As Ohio saw it, the tax was imposed on commercial activity conducted by NASCAR within the state of Ohio, and this includes the sale of Ohio broadcast rights to NASCAR events.

The Board of Tax Appeals will now have to readjust a bill totaling $529,520 sent to NASCAR, the Associated Press reports.

Subject to the Ohio tax were race broadcasts and merchandise sales, and NASCAR said other companies handle this and are rightfully taxed. This includes FOX Broadcasting Co.

As such, the tax as assessed to NASCAR was, in the association’s view, “an unconstitutional expansion of tax liability for out-of-state content providers.”

Writing the opinion for Ohio Supreme Court is Justice Pat DeWine, the son of Gov. Mike DeWine. Speaking for the majority, the judicial body determined that taxing NASCAR’s broadcasts “did not lie within the tax commissioner’s authority.”

Why? Its broadcast, media and sponsorship agreements are based on fixed fees that “do not vary with the amount of use.”

Justices Melody Stewart, Jennifer Brunner and Michael Donnelly dissented, arguing that the tax commissioner’s decision to calculate licensing fees separately from sales of NASCAR’s licensed products was proper and not, as NASCAR argued, a double tax.

“If a homeowner hires a plumber to fix his sink and pays the plumber with earnings that Ohio has already taxed, Ohio is fully justified in also taxing what the homeowner paid the plumber as part of the plumber’s earnings,” Stewart wrote.

However, that opinion was not that of the majority, resulting in a NASCAR victory in Columbus, Ohio.

— With reporting by Adam R Jacobson in Boca Raton, Fla.



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