Ohio court rejects business tax on fuel sales

COLUMBUS, Ohio - The Ohio Supreme Court has rejected the application of the state's business tax as it applies to fuel sales, accepting arguments that revenue from the tax can only be used on highway upkeep.

The decision Friday is a significant blow to the 7-year-old tax, which lawmakers adopted to replace what was considered an outmoded and inefficient way of taxing businesses.

The court ruled 6-1 that the Commercial Activity Tax cannot be applied to revenue of companies that make money selling fuel.

Builders, contractors, construction companies and engineers had sued over the tax. They said Ohio voters have repeatedly rejected the notion of diverting taxes raised from fuel sales to non-road work.

The court in 2009 upheld the tax when applied to grocery store food sales.