Equifax Ruling will Stand Says US Supreme Court

Equifax Inc.’s tax attorneys may have gone to court claiming that the state Department of Revenue in Mississippi had ruled adversely against it. But the US Supreme court has decided that the state department’s ruling will stay and has refused to hear Equifax’s plea for leniency.


Earlier in 2013, the Supreme Court of Mississippi had asked Equifax Inc. to prove that it did not owe any taxes to the state. When its records were checked by the state Department of Revenue it was unequivocally proven that the company had in fact earned taxable income in the state and as such the Department of Revenue decided to allocate some of the income to the state of Mississippi ruling that the money was in lieu of the taxes and penalties that the company owed the state. It was this decision that the tax attorneys for the credit agency were trying to repeal at the Supreme Court.

$700,000 in Fines for Equifax

According to the calculation made by the Mississippi State Department of Revenue, the company owed the state a total of $700,000 in fines and penalties for prior taxes which it had not paid. This estimate was upheld by the Mississippi Supreme Court which agreed with the revenue department’s calculations. The calculations were made by using an alternative apportionment method.

The Supreme Court had upheld the Revenue Department’s claims by reversing a Mississippi Court of Appeals’ decision, which was in favor of the company not paying taxes, in June 2013. In fact the state Supreme Court went so far as to say that the onus of proving that the Revenue Department’s use of the alternative apportionment method was not fair and was in fact arbitrary and ‘capricious’ lay on the taxpayers and not on the court.

Equifax Inc. has had better days.

Equifax Inc. has had better days.

According to the Mississippi Supreme Court the Revenue Department had not breached protocol by imposing taxes on the credit agency, and was in fact within its rights to have done so. The Court also stated that the use of an alternative method for tax calculation did not amount to the promulgation of a new rule which would have been in direct violation of the Mississippi Administrative Procedures Act.

New Tax Law in Mississippi

In 2014, a new tax law was passed in Mississippi. After intense lobbying by the business community in the state, the new law changes the way the state collect taxes from multistate corporations like Equifax. The new law clearly states that in order to prove that a company needs to pay more taxes in Mississippi the state Department of Revenue will have to provide clear and convincing proof of the same and do so in “limited and unique, nonrecurring circumstances.”

The tax attorneys representing the credit reporting agency tried to use this new law to prove that the ruling made in 2013 should be changed. However, the US Supreme Court has decided that the ruling will stay despite the best efforts made by Equifax’s tax attorneys.