$63 million tax claim shakes up Delaware's FY 2014 budget
The Delaware Department of Finance is investigating a $63 million tax refund claim from an unnamed company that alleges it paid Delaware taxes on business it conducted out of state.
According to Tom Cook, secretary of the Department of Finance, the corporate income tax claim was handed down in September and the state has been gathering information to determine its course of action.
“We have to look at it, we have to analyze the request and make sure it is valid,” said Cook. “Once again, the premise of the request is they feel they owe another state instead of Delaware. So it is asking for the money from Delaware so they can pay another state instead. It depends on where the income from this unique transaction was actually sourced.”
Cook said Delaware Economic and Financial Advisory Council was made aware of the possible liability but since a decision was not made, the claim has not been accounted for in the FY 2014 budget proposal.
“When you’re putting together the governor’s recommended budget, you base it off of what DEFAC is saying and at this point the liability though is understood, is not recognized, because no decision has been made,” said Cook. “So, I think he put together a sound budget but with the caveat that this potential exposure for the $63 million dollars is out there.”
The funds are currently being counted as part of the $158 million in corporate tax revenue the state plans to collect for FY 2014.
Cook said they plan to have a decision in March. He said some of the courses of action could be to deny the claim, partially agree with it or completely agree with it.
The state will adjust the budget in accordance with that decision.