She subsequently ordered the North Carolina Department of Revenue to refund Philip Morris $11.2 million, along with accrued interest.
Key Legal Interpretation: ‘Credit Allowed’
At the center of the case was the interpretation of “credit allowed” in a revised statute governing export tax credits.
Both the trial court and the administrative law judge initially ruled that North Carolina’s General Assembly had intended to limit annual credit generation to $6 million per year. However, the North Carolina Supreme Court disagreed and sided with Philip Morris.
In her majority opinion, Justice Tamara Barrington wrote that “credit allowed” refers only to the maximum amount a taxpayer may claim each year, not the total amount of credits generated. Therefore, Philip Morris was entitled to carry forward its excess tax credits for up to 10 years.
Legal Teams and Next Steps
Neither Philip Morris’ attorneys nor the North Carolina Department of Justice immediately responded to requests for comment.
Philip Morris USA Inc. is represented by:
