Syms parent settles with comptroller on back taxes

March 04, 2004|BY A SUN STAFF WRITER

The second of two Delaware holding companies that fought all the way to the U.S. Supreme Court to avoid paying taxes in Maryland has settled with the state's comptroller.

Maryland couldn't reveal the settlement amount, but it said SYL Inc., the holding company for clothing retailer Syms Corp., owed almost $1 million in back taxes, interest and penalties.

The comptroller's office has collected nearly $14 million from 18 holding companies since winning court cases against SYL and the holding company for packaging manufacturer Crown Cork & Seal Co., which also agreed to pay up recently.

Corporations have formed holding companies in Delaware because that state does not tax income from intangible property such as slogans and icons.

Corporations transfer ownership of intangible property to the holding company, then pay royalties to the shelter for the right to use those trademarks. This reduces their income in Maryland and other states.

But the Maryland Court of Appeals ruled that SYL and Crown Cork & Seal did owe Maryland taxes.

The comptroller's office plans to audit about 240 other holding companies suspected of owing taxes. Court dates have been scheduled for the holding companies of Toys `R' Us and Sherwin-Williams Co., part of a group of 70 that allegedly owe years' worth of taxes.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.