Piccadilly Can’t Avoid Transfer Taxes: High Court

Law360, New York (June 16, 2008, 12:00 AM EDT) -- The U.S. Supreme Court ruled Monday against bankrupt Piccadilly Cafeterias Inc., saying that struggling companies cannot get out of paying transfer taxes on asset transfers that occur before a bankruptcy court approves a reorganization plan.

The 7-2 decision marks a victory for Florida tax collectors looking to limit a federal exemption that permitted companies in bankruptcy to avoid the state’s transfer taxes on assets.

In this dispute, the Florida Department of Revenue had sought $39,200 in stamp taxes on some of the Baton Rouge, La.-based cafeteria...
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