The Supreme Court of Ohio upheld the denial of Total Renal Care, Inc.’s (“TRC”) refund claim of Ohio Commercial Activity Tax (“CAT”) that it paid on services that it performed outside of Ohio. Total Renal Care Inc.
v. Harris , Slip Op. No.
2024-Ohio-5685 (Ohio Dec. 9, 2024). The Facts: TRC, a subsidiary of DaVita, Inc.
, provides dialysis to patients with kidney disease and end-stage renal disease. Dialysis treatments are administered at locations throughout the United States, including in Ohio. In addition to dialysis services, TRC provides laboratory testing services and administrative services, such as back-office support, data processing, and procuring medical equipment and supplies.
TRC conducts these services in a number of states outside of Ohio. For the years at issue, TRC originally paid CAT on all gross receipts it received from locations in Ohio where dialysis was provided. TRC subsequently filed refund claims and asserted that a portion of those gross receipts were related to its laboratory and administrative services, which were performed outside of Ohio.
The Ohio Tax Commissioner denied TRC’s refund claims, and the Ohio Board of Tax Appeals (the “Board”) affirmed. TRC appealed the Board’s decision to the Supreme Court of Ohio. The Law: The CAT is imposed on “each person with taxable gross receipts for the privilege of doing business in [Ohio].
” The statute defines “taxable gross receipts” as receipts with an Ohio situs and provides that .