U.S. Supreme Court
Supreme Court Bankruptcy Ruling Denies Tax Exemption
Posted Jun 16, 2008, 08:52 am CST
By Debra Cassens Weiss
The U.S. Supreme Court has denied a tax exemption for assets transferred from Piccadilly Cafeterias Inc. to another company before its bankruptcy reorganization received court approval.
The 7-2 ruling for Florida favors state tax collectors, the Associated Press reports.
Federal bankruptcy law bars stamp taxes on assets transferred to a new owner under a court-approved reorganization plan. At issue is whether the ban applied to taxes imposed on a transfer before approval.
In his ruling for the majority, Justice Clarence Thomas wrote that the exemption doesn't apply unless a bankruptcy plan has received approval.
The case is Florida Department of Revenue v. Piccadilly (PDF posted by SCOTUSblog).