ST. PAUL, Minn. – The state of Minnesota has withheld $33 million in tax credits from IBM after the company filed revised tax documents attempting to recover the money.
The Department of Revenue is making things very difficult for IBM and their taxes. From 2012 to 2014, IBM claimed only $265,000 in research tax credits, reports 4-traders.com. IBM says that based on their expenditures, they were eligible for many times more than that.
The state of Minnesota disagreed, and the Minnesota Department of Revenue issued an order denying IBM additional research tax credits, reports 4-traders. IBM had filed amended tax documents in 2016 attempting to recover the money, and the department rejected them in March 2017.
Now the matter is headed to court, as the New York based IBM filed suit against the Department of Revenue in Ramsey County District Court, reports the Faribault Daily News. IBM’s suit seeks to recover the higher amount of total refunds they were eligible for under the research tax credits, as well as interest on the difference between that amount and the $265,000 in credits which the company claimed in their initial tax filings from 2012 through 2014.
The Department of Revenue now has 20 days to file a response to the lawsuit in the Ramsey County District Court.
Under Minnesota’s Research and Development Tax Credit, companies that engage in some research activities are eligible to claim 10 percent of expenses, up to $2 million. After that expenses are eligible to be claimed at a rate of 2.5 percent. A company’s research expenses must also occur within Minnesota in order to be eligible for the tax credit.
