Loophole Might Let This Pizza Hut One-Percenter Sue KS For $42M In Taxes

One-percenter Pizza Hut magnate and outspoken Republican Gene Bicknell is putting the economy of the state he claims to love in jeopardy. The Kansas Court of Appeals said a lower tax court ignored state regulations when it ordered Bicknell to pay $42 million in taxes and penalties for the sale of NPC International in 2006. Bicknell made $615 million from the sale of NPC International, America’s largest holder of Pizza Hut franchises.

Tax loophole could force Kansas to pay back $42 million to Gene Bicknell.

Bicknell, who twice ran for the Republican nomination for governor of Kansas, has been rigorously fighting to get back the $42 million ever since he was ordered to pay in 2013 based on an audit of his 2005-2008 taxes. Bicknell’s contention is based on his claim that his primary residence at the time was Florida, even though after an investigation The Kansas Department of Revenue determined it was in Kansas.

Keeping some kind of residence in a more tax-friendly state a fairly common loophole for the ultra-rich to use to avoid paying taxes. The rules are complicated, hard to prove, and typically require and an expense accounting team who specialize in getting one-percenters out of paying taxes.

The Kansas Court of Appeals also cited the Kansas Court of Tax Appeals’, also known as COTA, lack of proper explanation as part of its reason for having COTA re-try Bicknell’s case.

The Court of Appeals opinion reads:

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.

This is why the rich write their own tax laws…

This doesn’t mean Kansas will have to pay Bicknell back the $42 million now, but that COTA must rule again on the case while keeping regulations that are more favorable to Bicknell in mind. Regulations that are written by and passed for the ultra-rich and their lobbyists. In the mind of these casino capitalists, the jobs created by the one-percenters should be enough. According to the Topeka-Capital Journal:

…in 2014, Tim Connealy, chief financial officer for the Bicknell Family Holding Co., told The Associated Press the dispute had frustrated Bicknell after a lifetime of building companies and creating jobs ‘to better the state.’

This decision couldn’t come at a worse time for the state of Kansas. Budget deals created by the state Legislature and Gov. Sam Brown were supposed to leave Kansas with a balance of about $77 million at the end of the fiscal year. However, revenue collections haven’t raised as much as expected.

If it came during the current fiscal year, a $42 million  payout to super wealthy Bicknell could push Kansas into the red.

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