Walmart tries to skip sale tax in North Carolina.. and fails (transaction, refund)

[evilnewbie]

Apparently large companies are trying to use tax shelters and not pay their taxes... Walmart has to pay over 35 M in back sales taxes.... I wonder if there is a penalty fee and interest with it... If I didn't pay $1 in back taxes I am sure the state would add in fees and interest for it... another greedy company not paying its taxes again..

Wal-Mart Loses North Carolina Tax Case (broken link)

[UpperPeninsulaRon]

Originally Posted by evilnewbie

Apparently large companies are trying to use tax shelters and not pay their taxes... Walmart has to pay over 35 M in back sales taxes.... I wonder if there is a penalty fee and interest with it... If I didn't pay $1 in back taxes I am sure the state would add in fees and interest for it... another greedy company not paying its taxes again..

Wal-Mart Loses North Carolina Tax Case (broken link)

I'm afraid that I do not understand the comment about paying back sales tax. From the article:

Wal-Mart noted that it had paid the taxes and that the case was about its request for a refund.

"Because of the possibility of an appeal, we won't comment on the details of the case, however we believe that all taxpayers should have the right to rely on clearly defined tax laws that are reasonably and fairly enforced," Wal-Mart said in a statement.

The case was about the ownership structure Wal-Mart set up for its store properties in North Carolina.

First of all, Wal-Mart is not paying back any taxes. They paid the taxes and were asking for a refund pending a decision. Seems more forthright than some folks who exagerate their charitable contributions first and wait for the government to catch them.

Second, the issue has nothing to do with sales taxes - they were only questioning a legal right to deduct as expenses the effect of a real estate tranaction.

Finally, and most importantly, is the statement about tax laws being clearly defined and fairly enforced. We are going through a situation where the state enacted, then repealed, a service tax on businesses well after the date that it was to go into effect. Then they added another tax, but when you go to the state treasury website, they have enacted a tax that they cannot even explain to the people who are supposed to pay it. How can anyone operate under these kinds of uncertainties?

[evilnewbie]

Well if they want that 33.5 M money back, are they not trying to skip on paying sales tax? Suppose instead (by freak accident) that the government gave them that money back... would you not call that skipping paying the sales tax? I said they were "trying" it just wasn't successful...

[UpperPeninsulaRon]

Originally Posted by evilnewbie

Well if they want that 33.5 M money back, are they not trying to skip on paying sales tax? Suppose instead (by freak accident) that the government gave them that money back... would you not call that skipping paying the sales tax? I said they were "trying" it just wasn't successful...

Sorry, this has nothing to do with sales taxes.

[Lola Granola]

This is not a sales tax issue. This in an income tax issue.

As individuals, we consider tax savings when structuring transactions... the entire real estate industry is built around the mortgage interest deduction. And charities routinely point out the tax savings when soliciting donations.

Likewise, corporations structure their transactions with an eye towards tax savings. Nothing evil about this. The NC tax officials disagreed with one of their deductions, and the tax department at Walmart and their outside advisors felt they had a strong enough legal position to fight it in court. And they lost. Things like the happen ALL THE TIME. There are THOUSANDS of tax cases involving corporations every year. This only made the news because it is Walmart.

And there are thousands of tax cases involving individuals every year... they rarely make the news. Everyone seeks to reduce their tax bills. Sometimes the government disagrees with the taxpayer's position, and sometimes it goes to court. That's the nature of the system.

[lchoro]

It appears that Wal-Mart set up the in-house REITs to capitalize on the large disparity in tax rates between earned income and dividends created by the Bush tax cut. They can cut their tax rate by half by moving their profits to their REITs.