Philip Morris USA Inc. is set to receive a tax refund of $11.2 million, plus interest, following a North Carolina Business Court ruling that aligned with the state Supreme Court’s interpretation of cigarette export tax credits.
In a Monday order, Judge Julianna Theall Earp reversed her previous decision, along with that of an administrative law judge, granting Philip Morris summary judgment in its prolonged legal battle over North Carolina’s $6 million cap on cigarette export tax credits. The ruling was based on a Dec. 13 North Carolina Supreme Court decision, which clarified that the cap limits only the amount of credits claimed per year, not the total credits generated.
Philip Morris Prevails After Long Legal Battle
The ruling enables Philip Morris to reclaim taxes and penalties it previously paid after it was denied export tax credits from 2005 to 2007 on its 2013 and 2014 corporate tax returns.
“Philip Morris is entitled to the export tax credits carried forward pursuant to [state law] and taken against its North Carolina corporate income tax on the tax returns at issue,” Judge Earp wrote in her decision.
