Archive for Thursday, October 15, 2015

Kansas may face $42M tax tab to former Pizza Hut magnate

October 15, 2015, 9:30 a.m. Updated October 15, 2015, 12:09 p.m.

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— A state appeals court ruling in favor of a former Pizza Hut magnate could put Kansas on the hook to refund millions of dollars in taxes he was forced to pay two years ago.

The Kansas Court of Appeals last month said a lower tax court had blatantly ignored state regulations when it ordered Gene Bicknell to pay $42 million in taxes and penalties for the sale of NPC International in 2006.

The state audited Bicknell's taxes from 2005 to 2008 and determined he owed the money, the Topeka Capital-Journal reported. Under protest, he handed the money over in 2013.

Bicknell — whose company was the nation's largest holder of Pizza Hut franchises — argued that he lived in Florida at the time of the sale, while the Kansas Department of Revenue contends his primary residence was in Kansas.

In its ruling in September, the Kansas Court of Appeals scolded the tax appeals court for ruling Bicknell was a Kansas resident without considering Revenue Department regulations for determining residency for tax purposes.

The appeals court also criticized COTA for failing to explain why it made its ruling.

"It is well established that COTA must give adequate reasons for its decisions. In its order, COTA focused exclusively on Kansas statutory law and caselaw . concerning Gene's tax-residency status. COTA expressly ignored or disregarded the applicable (Revenue) regulations in explaining its findings and conclusions," the Court of Appeals opinion reads.

The ruling sends the case back to COTA and orders it to take into account state regulations potentially favorable to Bicknell. That doesn't mean Bicknell will ultimately prevail, but if he does it could be a blow to a state that's already struggling to balance its books.

The Legislature and Gov. Sam Brownback crafted a revenue and budget deal in June to pay for fiscal year 2016, which runs through June 2016, by raising sales taxes and cutting costs.

Those deals were supposed to leave the state with a balance of about $77 million at the end of the fiscal year, but revenue collections have fallen below expectations during the first three months. An additional $42 million hit from a Bicknell payout, if it came during the current fiscal year, could push the state's end balance into the red.

House Appropriations Chairman Ron Ryckman Jr., an Olathe Republican, indicated any payout would likely come from the state's general fund. Even if the state didn't have to pay this year, an additional $42 million in required spending could complicate any year's budget.

Department of Revenue spokeswoman Jeannine Koranda declined to comment, citing pending litigation.

Comments

Jennifer Alexander 2 years, 2 months ago

Just take it out of Sammy's paycheck. No big deal right?

Bob Forer 2 years, 2 months ago

Are you referring to his official paycheck from the state of kansas or the one he receives from the Koch boys?

Larry Tucker 2 years, 2 months ago

Since the state knew that the Bicknell case was in court why didn't they include that contingency in the 2016 budget? Oh well, its just another example of why lawyers don't understand math. Where will Brownback's staff come up with the $42 million plus make up the $67 million shortfall in revenues to balance their budget? I have a feeling, that someone is on the phone to Washington DC.

Brett McCabe 2 years, 2 months ago

Pretty shocking that an entire state's annual budget could be dependent on a single individual's tax bill. Every time I think that I've heard it all with this administration, they surprise me again.

William Weissbeck 2 years, 2 months ago

Did the guy at least pay taxes in Florida? If he didn't, or considerably less, that should tell you something about the tax codes. If you are rich you can move you and your money always one step ahead of the tax man.

Joe Blackford II 2 years, 2 months ago

Perhaps taking KS to the cleaners will be the 2nd best thing that ever happened to Gene Bicknell?

Bob Forer 2 years, 2 months ago

An all-star cast including Gene Bicknell himself, and Vanna White.

One of the worst B movies ever made.

Chuck Holder 2 years, 2 months ago

It just keeps getting better and better for Kansas.

Richard Heckler 2 years, 2 months ago

Will the ALEC Party receive a kick back from the potential tax dollar refund?

Michael Kort 2 years, 2 months ago

Just another victum of the need of the Kochback Administrations to reward some, at the expense of many others . 2013 to 2015 ! Hummmm ? Sounds like they owe this guy some just $ interest due, for several years of free use of his money, which they used thru an abuse of the law to take it from him, plus they should be covering his legal representation fees to get what was his own money back ! Who the heck (?) from some other state would want to do business in Ks. when they discover how they try and shake down out of state owners, who sell a business located in Ks. ?

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