The U.S. Supreme Court declined Monday to hear an appeal from Equifax Inc. involving what it considered an adverse tax ruling in Mississippi.

The appeal was a reaction to a decision by the Mississippi Supreme Court last year that the credit bureau had to prove it didn't earn any taxable income in the state.

Mississippi's Department of Revenue had examined Equifax’s income and allocated some to the state, ruling it owed taxes and penalties. The state's highest court upheld the Revenue Department’s calculation of Equifax's taxes based on revenue earned in Mississippi, thus increasing its tax liability from zero to more than $700,000, according to court documents.

State lawmakers responded during the 2014 session by passing a law to change how the state collects taxes. The Mississippi business community lobbied hard for the law.

A key part of the law could make it harder for the state to rule that multistate corporations are paying too little in taxes to Mississippi. The law also makes it easier for taxpayers to appeal Revenue Department rulings.

The Revenue Department will have to present clear and convincing proof before it can reallocate how a company splits its income among states, and only do so in "limited and unique, nonrecurring circumstances." The department estimates all changes in the law, including a phase-in of lower interest rates for overdue taxes, will cost Mississippi $100 million a year.

The U.S. Supreme Court had no comment on its decision.

 

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