From: Captive Insurance Times
The Maryland Tax Court has ruled that Leadville Insurance Company (Leadville), the wholly-owned captive insurer of Macy’s Retail Holding (MRH), the parent company of the Macy’s department store franchise, will be exempt from paying a $23.8 million tax bill.
In early 2019, in Comptroller Of The Treasury (Comptroller) v Leadville at the Maryland Court of Special Appeals found that Leadville was an unauthorised insurer as it was not licensed to conduct insurance in the state, and is therefore required to pay income tax on its revenues.
The court vacated the decision made by the Circuit Court for Anne Arundel County and remanded it back to the Tax Court.
The case was put forward to the Tax Court as the Court of Special Appeals did not address Title 4 of the Insurance Article.
The Court of Special Appeals held that Leadville, as an insurance company, does not hold – and is not required – a certification from the Maryland Insurance Commissioner and was an unauthorised insurance company and is regulated by Title 4 of the Insurance Article.
In 2010, during an audit of MRH by the comptroller, it was discovered that MRH had claimed deductions for substantial amounts of interest paid to Leadville.