Kramer Levin Wins Appeal of New York State Tax Case On Behalf of UniCredit

The New York State Tax Appeals Tribunal has dismissed the appeal of the New York State Tax Department and upheld the position of Kramer Levin client UniCredit S.p.A., an Italian bank with a branch in New York, that amounts recorded in its international banking facility are not income and should be disregarded for purposes of calculating the bank’s New York tax.

Kramer Levin first represented UniCredit, S.p.A., in challenging a Notice of Deficiency issued by the New York State Department of Taxation and Finance, Division of Taxation. Following a hearing before an Administrative Law Judge (ALJ), the ALJ issued a decision on November 7, 2013, canceling the Division’s adjustments and holding that the Division had misapplied and misinterpreted the Tax Law and regulations by identifying income from IBF interbranch transactions as ineligible gross income and using it to adjust the bank’s allocation factors. The Division of Taxation appealed that ruling. The New York State Tax Appeals Tribunal heard oral arguments on November 19, 2014.

The Kramer Levin team consisted of Tax partners Maria T. Jones and Pamela M. Capps and Litigation special counsel Susan Jacquemot.