Warehouse Distribution Center

Pursuant to division (F)(2)(z) of section 5751.01 of the Revised Code, “gross receipts” excludes “qualifying distribution center receipts.” That division defines “qualifying distribution center receipts” and other terms used in that definition. While all the requirements of division (F)(2)(z) of section 5751.01 of the Revised Code must be met, it essentially provides that certain receipts of a supplier from qualified property delivered to a qualified distribution center are excluded from that supplier’s calculation of gross receipts for purposes of the commercial activity tax. The extent of this exclusion is based on the Ohio delivery percentage as determined by the qualified distribution center, and such percentage applies to all suppliers shipping to that location regardless of the percentage of that supplier’s actual property that will be shipped outside the state.
(B) In order to meet the requirements to be a qualified distribution center, a warehouse or other similar facility, in addition to meeting all other requirements specified in division (F)(2)(z) of section 5751.01 of the Revised Code, must meet both of the following requirements for the qualifying period:
(1) The operator of the warehouse or similar facility and members of the operator’s consolidated elected taxpayer group as described in section 5751.011 of the Revised Code must have had at least five hundred million dollars in cumulative costs from qualified property delivered to the distribution center by its suppliers during the qualifying period. Such costs only include costs of qualified property, which is tangible personal property delivered to a distribution center that is shipped there solely for further shipping by the distribution center to another location either within or without this state. Only the cost of the qualified property, less any deductions (e.g., cash discounts) is considered for purposes of this calculation. Any costs or reimbursements for providing a service to the seller, such as management consulting services, are excluded from the calculation. Further, only purchases made by members of the same consolidated elected taxpayer group and received at the distribution center are included in the calculation of the five hundred million dollars. All purchases from members of the same consolidated elected taxpayer group must be excluded from the calculation and cannot be included in the five hundred million dollar threshold.

Credits

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