Blurred Lines: State Taxation of Nonresident Partners

State Tax Notes

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On May 4, just a few days before the American Bar Association Section of Taxation’s annual meeting in Washington, the Ohio Supreme Court issued its landmark decision in Corrigan v. Testa. The proximity of the decision’s issuance to the date of the meeting precluded a panel discussion on it. However, practitioners in attendance discussed the case privately with great interest. Corrigan is the latest in a long line of cases involving a state — in this case Ohio—attempting to impose its net-income-based tax on nonresidents whose only connections with the state are their ownership interests in passthrough entities operating there.

Republished with permission. This article, “Blurred Lines: State Taxation of Nonresident Partners,” was first published in State Tax Notes on August 29, 2016, pp. 689-694.