Company Tax Techniques Could Be Costly in Closely Watched Mass. Cases
Three closely watched Massachusetts cases over aggressive corporate tax avoidance techniques are likely to be decided soon.
And if they come down in favor of the state, as some observers say they may, other companies both there and elsewhere are likely to ante up much-needed additional revenue, reports the Boston Globe.
A case pitting the state against Toys “R” Us is the most closely watched, the newspaper recounts. It concerns the company’s almost 20-year-old practice of having its stores pay royalties to a subsidiary set up in Delaware, which doesn’t tax intangible assets, for use of the Geoffrey the Giraffe trademark. At issue is $1.6 million plus penalties and interest.
“These decisions are going to be big news nationwide,” says Donald Griswold. An attorney in Washington, D.C., he represented credit card giant MBNA Corp. (now owned by Bank of America Corp.) in similar litigation in Indiana and West Virginia.
