South Dakota High Court Bars Citibank Recoup Of $30M In Tax
PIERRE, S.D. (AP) — Citibank will not be able to reclaim $30 million in overpaid bank taxes to the state because it didn’t request a refund until after the three-year legal window had passed, the South Dakota Supreme Court said in an opinion released on Thursday.
The high court upheld lower rulings and rejected Citibank’s argument that it should be able to request the refund outside the time limit because it said state rules carve out a limited exception to the statute of limitations.
The case goes back to a 2012 claim from Citibank for a $30 million refund for state bank taxes paid between 1999 and 2002. The Internal Revenue Service in 2012 reduced Citibank’s taxable income for the earlier period, which lowered the state bank franchise tax payment since that is based on federal taxable income.
South Dakota’s Department of Revenue rejected Citibank’s claim, and the state has argued that the firm didn’t request a refund until after the three-year statute of limitations passed. Citibank has argued that it complied with state regulations and filed a timely refund request after the federal tax agency finished its review of the financial group’s books, when it learned its final tax outcome.
The Department of Revenue told the justices during oral arguments that Citibank should have asked for the refund within the statute of limitations — even though the federal audit wasn’t finished — in order to comply with state law.
A circuit court judge had dismissed the bank’s appeal of an administrative appeal in 2013 before Citibank brought the case to the high court.
Citibank and Gov. Dennis Daugaard’s office didn’t immediately comment.
