Tobacco giant Altria Group Inc. has lost its bid for a $38 million tax refund, after a Virginia federal court ruled the company was on the hook for income tied to foreign subsidiaries through its stake in Anheuser-Busch.
Judge Rejects Refund Claim
U.S. District Judge M. Hannah Lauck on Monday sided with the federal government, holding that the 2017 Tax Cuts and Jobs Act (TCJA) eliminated a key rule that once shielded companies like Altria from being taxed as indirect shareholders of controlled foreign corporations (CFCs).
Altria had argued the change was a minor amendment, not a wholesale repeal. But Judge Lauck disagreed, writing that the law “struck the passage” outright, making Altria’s tax liability unavoidable.
How Anheuser-Busch Ties Triggered Taxes
At the heart of the dispute was Altria’s 10.2% stake in Anheuser-Busch InBev SA/NV, which owned the subsidiaries generating taxable income. Under Subpart F rules, the repeal of Section 958(b)(4) meant Altria was treated as indirectly owning the subsidiaries’ stock, regardless of its lack of control.
