Home      Login

Abstract: 

The U.S. Constitution limits state power to tax outsiders. This article analyzes the recent Ohio Supreme Court decision in Corrigan v. Texta , which held that Ohio could not tax capital gains of a nonresident investor from the sale of an interest in a pass-through enterprise. In addition to focusing on the Due Process Clause, which was the basis for the court’s ruling, the article also addresses the problem under the Dormant Commerce Clause and suggests that states may not impose capital gains taxes on nonresident investors in pass-through entities except in unusual circumstances.

Keywords: Corrigan v. Testa, state capital gains taxes, pass-through entities, Due Process Clause, Dormant Commerce Clause

Affiliations:  1: Case Western Reserve University.