Equifax takes tax dispute to U.S. Supreme Court
Published: April 28,2014
WASHINGTON — Credit bureau Equifax Inc. is asking the U.S. Supreme Court to hear appeal from an adverse tax ruling in Mississippi.
The appeal is a reaction to a 2013 Mississippi Supreme Court decision that Equifax had to prove that it didn’t earn any taxable income in the state. The state Department of Revenue examined Equifax’s income and allocated some to Mississippi, ruling it owed taxes and penalties.
The state Department of Revenue has a deadline of May 23 to file a response to Equifax’s petition.
The Mississippi court upheld the Revenue Department’s applying a market-based tax apportionment method to determine the tax bill of Equifax. The market-based method calculated the company’s taxes based on revenue earned in Mississippi, thus increasing its tax liability from zero to over $700,000, according to court documents.
Lawmakers responded during the 2014 session to change how Mississippi state government collects taxes.
Gov. Phil Bryant signed the bill earlier this month.
A key part of the law could make it harder for the state to rule that multistate corporations are paying too little in taxes to Mississippi. It says the Department of Revenue would have to present clear and convincing proof before it could reallocate how a company splits its income among states, and only do so in “limited and unique, nonrecurring circumstances.”
The Department of Revenue estimates all changes in the law, including a phase-in of lower interest rates for overdue taxes, will cost Mississippi $100 million a year.
The law also makes it easier for taxpayers to appeal Revenue Department rulings.
The Mississippi business community lobbied hard for the law.
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