Capital One Beats Florida Income Tax on Credit Card Interest

Capital One convinced a Florida trial court that the revenue department overcharged its banks corporate income tax by improperly attributing credit card interest to the state.

Capital One Bank (USA) NA and Capital One NA relied on a provision of the state income tax apportionment law that says interest income from financing transactions is sourced to Florida if the interest is received in Florida.

That’s a stronger position than the revenue department’s reliance on the statute’s “general, catch-all provision” sourcing “any other gross income, including other interest” to Florida if the income resulted from the taxpayer’s operation as a financial ...