Tax News

CCH (cch.taxgroup.com) reports:

  On May 29, 2008, the California State Board of Equalization (SBE) approved a global settlement with Barnes & Noble.com that resolves all disputes between Barnes & Noble.com and the State of California for sales and use taxes, including pending litigation in the U.S. District Court for the Eastern District of California and the California Court of Appeal (First District). Under the settlement, two tax determinations against Barnes & Noble.com, plus all interest and penalties, were canceled by the SBE. In addition, the SBE waived all claims for sales and use taxes, interest, and penalties through November 1, 2005, the date on which Barnes & Noble.com voluntarily commenced collecting and remitting sales and use taxes to California. A final settlement agreement was entered into by the parties on August 19, 2008.

  Barnes & Noble.com had filed a complaint on December 21, 2007, in the U.S. District Court for the Eastern District of California for declaratory and injunctive relief against the members of the SBE and others. The complaint sought a declaration that the actions of the state in seeking to impose California sales and use tax on the sales of Barnes & Noble.com for the period of May 1, 2000, through March 31, 2004, plus interest and penalties, violated the Commerce Clause and the First Amendment of the U.S. Constitution, as well as the California Administrative Procedures Act. This assessment was also the subject of an administrative protest filed by Barnes & Noble.com. Barnes & Noble.com had also challenged another earlier assessment by the SBE for the period of November 15, 1999, through January 31, 2000. This earlier assessment was struck down by a decision of a California superior court on September 7, 2007 (see TAXDAY 2007/11/09, S.5) in favor of Barnes & Noble.com, and the SBE had filed an appeal in the California Court of Appeal (First District).

Form 10-Q Quarterly Report , Barnes & Noble, Inc., filed with the Securities and Exchange Commission on September 11, 2008.