OHIO'S TAXMAN IS TAILGATING NASCAR.

• Author: Boehm, Eric
• Position: POLICY - Jeff McClain

DURING PROHIBITION, SOUPED-UP cars that could outrun the cops made for successful bootlegging. Today the corporation that runs America's most successful stock car racing series, NASCAR, is likewise trying to get out in front of some meddlesome agents of the state.

Jeff McClain, Ohio's tax commissioner, claims NASCAR owes the state more than $549,000 in unpaid taxes merely because Ohioans watched NASCAR races on television. McClain says that money is due under Ohio's commercial activity tax (CAT), a 0.64 percent levy on the gross receipts of any business that earns at least $1 million in the state. The Ohio Department of Revenue collects about $2 billion annually from the CAT, which it says companies must pay "for the privilege of doing business in Ohio."

Last year, the Ohio Board of Tax Appeals, a quasi-judicial entity, sided with McClain. NASCAR, which is based in Florida, appealed that decision to the Ohio Supreme Court, which will hear the case later this year.

NASCAR says it pays tax on revenue earned at events in Ohio and on the direct sale of merchandise to consumers in Ohio. The state's attempt to claim a share of TV revenue, NASCAR argues in court documents, is a "remarkable position" that would "automatically apply the...