The Texas-based manufacturer of Tito’s Vodka will have to pay nearly $750,000 in taxes and penalties after a decision by the Maine Supreme Judicial Court.
The court determined the manufacturer did not file tax returns for an audit period initiated by Maine Revenue Services and must pay $745,452.18 in taxes and penalties imposed by the State Assessor.
The Supreme Court reversed a decision by the Maine Court of Tax Appeals and upheld an original determination from Kennebec County Superior Court.
The high court confirmed that the manufacturer – Fifth Generation – did business in Maine and owned goods stored in a warehouse in Portland.
Fifth Generation had claimed it did not own or sell any tangible property, claiming its goods were transferred to the warehouse when its spirits from Texas were transported through a common carrier.
But the Supreme Court determined Fifth Generation’s argument was undercut by its own admission that to sell alcohol in Maine, the State required suppliers to store their product in a warehouse and to delay transfer of title.
Fifth Generation never filed as a “pass-through” entity as required by Maine Revenue Services. Maine regulations require pass-through entities that have a “nexus” with Maine to withhold income tax that its shareholders or members must pay.
The Supreme Judicial Court handed down its decision Thursday in a 4-1 ruling.
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