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Decisions on Macy's imprisoned insurer's tax claims were excluded



The special appeal court in Maryland has filed and revoked a decision to issue a summary judgment in a case of a $ 23.8 million tax, penalty and interest rate alleged by the state of Maryland from Macy & # 39; s Retail Holding Inc.

In 2010, Maryland Comptroller for Treasury reviewed a Macy's affiliate and eventually assessed the prison Leadville Insurance Co. for intercompany interest payments it received from Macy's during the tax year 1996-2003, according to the decision of Comptroller of Treasury v. Leadville Ins. Co published on Tuesday. Leadville, incorporated in Vermont, is a prison that provides insurance to Macy's subsidiaries and subsidiaries, including Macy's Retail Holdings Inc. and licensed by the Vermont Insurance Commissioner for relevant time periods, but did not include a Maryland Insurance Commissioner Certificate to engage in the insurance industry in Maryland.

During the auditor's review, it was discovered that Macy's Retail Holdings had claimed deductions for significant amounts paid to Leadville under the judgment. Comptroller noted the difference between Leadville's premium income and intra-group interest income. From 1

996 to 2003, Leadville earned more than $ 2 billion in intra-group interests and $ 52 million in insurance revenue. In addition, Leadville paid premium quotes in Vermont but did not pay any premium income tax or corporation tax in Maryland even though they received substantial proceeds from interest payments distributed to Maryland, so the reviewer made the $ 23.8 million response in response. [19659002] On December 14, 2010, the auditor's hearing and appeal department conducted an informal hearing, during which Leadville claimed that it was an insurance company under Section 6 of the insurance article and therefore exempt from paying income tax under judgment. But Leadville admitted that it had not paid any Maryland premium tax, had not been authorized to conduct business in Maryland from the Maryland State Department of Assessments and Taxation, had not had a certificate of authority from the Maryland Insurance Commissioner, had not conducted or requested any business in Maryland , had no agents in Maryland, had not received any income from Maryland residents or units attributable to insurance premiums and had not investigated any risks or claims in Maryland. The hearing aid concluded that the internal interest payments were taxable and the tax exemption did not apply.

Leadville appealed the final decision to the Maryland Tax Court and moved for summary judgment granted by the tax authority on March 30, 2017, referring to its 2015 decision in National Indemnity Co., successor to Wesco Financial Ins's interest. Co. v. Comptroller of the Treasury where it was claimed that the legislation in question in the regulation, regulations and other published guidance required insurers similar to the petitioner in that case not to be subject to Maryland income tax. Except for the quote on national reimbursement grounds, the tax authority memorandum simply noted the auditor's assessment and Leadville's argument that as a section 6 insurance companies are exempt from income tax. The tax court's decision was confirmed by an appeal to the Circuit Court of Anne Arundel County, which the appellant brought.

The Court of Special Appeals considered three main issues: Tax Tax Court wrong in concluding that Leadville qualifies as an insurer under Section 6 of the insurance article, thus exempt from corporation tax, when it is not authorized to conduct business as an insurer in Maryland and does not receive insurance premiums from any insurer in Maryland. is Leadville, an unauthorized insurer governed by Section 4 of the insurance article, responsible for corporate taxation when it earns interest from a subsidiary operating in Maryland; and is Leadville responsible for corporate taxation under section 4 of the insurance article?

"That Leadville is authorized to conduct reinsurance transactions and that it is not necessary to hold an authority certificate is irrelevant to the Court's Determination of whether (Leadville) is an" insurance insurer "under the insurance article," the appeal court said in rejecting them. arguments. "Simply put, an insurance company that does not have a certificate of authority is" unauthorized. "That Leadville acknowledges that it has no such certificate causes the court to find it simple: (Leadville) is an unauthorized insurer.

The tax court conquered that liberation as provided for in Title 6 applies to Leadville under the appeal court.

"In this case, there is no indication that the tax authority fully considered Appelea's heading 4 tax implications" the appeal court stated in response to the third question. As a management agency and tasked with administering the tax regulations of the State of Maryland, it would be illogical for the court to prevent the consequences of Title 4 preventively without first allowing the tax court to do so. As such, we believe that the best thing is to lead the court's decision and instruct the Tax Court to decide whether Title 4 gives an exception for (Leadville). "

" When it comes to corporate policy, Macy's does not comment on ongoing disputes, says a company's spokesman in an email.

                    


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