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California gets split verdict on tax case before U.S. Supreme Court

Posted By Administration, Wednesday, April 20, 2016

California’s tax collectors got a split verdict Tuesday from the U.S. Supreme Court in a multimillion-dollar fight with a wealthy computer-chip inventor from Southern California that’s been brewing for a quarter century.

The court, on a 4-4 vote, upheld Las Vegas entrepreneur Gilbert Hyatt’s right to sue the California Franchise Tax Board in Nevada state court over the way tax collectors have treated him. Hyatt claims the California investigators dug through his trash and violated his privacy in their effort to prove he was still a Californian when he came into millions.

The California agency did win a significant point, however. The Supreme Court ruled that under Nevada law Hyatt’s damage claim against California would be limited to a maximum of $50,000. A Nevada jury in 2008 awarded Hyatt around $490 million, although the Nevada Supreme Court later reduced the ruling to $1 million.

The U.S. court’s 4-4 vote is a result of the death of Justice Antonin Scalia, which has left a vacancy on the court. Because the court was evenly divided, the ruling of a lower court stands. It was the second time the Supreme Court had weighed in on Hyatt’s tax dispute; in 2003 it ruled for the first time that he had the right to go to court in Nevada.

Read the whole story at SacBee

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