Giddens v. Testa
Annotate this CaseErnest and Louann Giddens resided in Missouri but paid Ohio income tax as owners of shares in a corporation that did some of its business in Ohio. In 2008, that corporation was an S corporation, and therefore, its income passed through for tax purposes. The tax commissioner reduced the amount of the “nonresident tax credit” that relates to a distribution from the corporation. The Giddenses had allocated the distribution outside Ohio, arguing that it constituted a dividend that was “nonbusiness income” allocable to Missouri. The tax commissioner determined that the distribution should be treated as “business income” and concluded that a portion of it was taxable by Ohio based on the proportion of the corporation’s business in Ohio. The Board of Tax Appeals affirmed. The Supreme Court reversed, holding that the Giddenses properly treated the income as nonbusiness - rather than business - income.
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