A national shoe retailer with more than two dozen stores in Texas has sued the state comptroller, casting doubt as to liability of more than $500,000 it paid the state in taxes, but that it says it doesn’t owe.
The lawsuit, filed by DSW Shoe Warehouse Inc., says the company paid $570,222 to the state for what the comptroller’s office said was uncollected taxes. In the lawsuit, pending in state district court in Travis County, the company says that it paid the taxes “under protest” in January and really doesn’t owe the money. The lawsuit seeks repayment of the amount paid to the state. Texas’ attorney general also is named as a defendant in the suit.
Officials of the retailer said they believe the comptroller’s auditor applied faulty sampling methods that did not follow state guidelines in coming up with the amount the state said DSW owed.
The attorney representing DSW in the lawsuit said the comptroller’s office did not use statistical sampling techniques that are widely recognized. Sampling, in tax terms, is the method the comptroller used to figure out how much a company should have collected in sales taxes over a specified time period. In this case that period is July 1, 2005, through Sept. 30, 2008. The attorney said the comptroller’s office contends it can use whatever sampling methods it wants.
Fighting a government agency, whether it is a state taxing authority or the Internal Revenue Service, is never easy for businesses large or small. Consulting early on with an experienced tax attorney who knows the laws and can ensure a company is doing everything right is important.
Source: Austin American-Statesman, “DSW Shoe Warehouse sues comptroller over $570,000 tax assessment,” Barry Harrell, Feb. 14, 2012