(AP) - A North Carolina judge has ruled against Wal-Mart Stores Inc. in a $33.5 million tax dispute with state revenue officials over how the retailer calculated taxes for its stores there.
Bentonville, Ark.-based Wal-Mart said Friday it is studying the Dec. 31 ruling and has not decided how to react.
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.
According to court records accessed through the Wall Street Journal Web site, Wal-Mart transferred ownership of its stores to a number of in-house real estate investment trusts (REITS), and then cut its tax obligation by taking deductions for rent payments to those REITS.
In a judgment signed on December 31, Emergency Special Judge of Superior Court Clarence Horton Jr. ruled 'there is no evidence that the rent transaction, taken as a whole, has any real economic substance,' other than for cutting Wal-Mart's taxes.
The judge dismissed the retailer's suit, where it sought a refund of the $33.5 million in taxes, interest and penalties it paid after the state revenue office determined it had underpaid.
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