Disney, NY Clash at High Court Over Tax Treatment of Royalties

New York’s high court will consider whether the state double taxed the Walt Disney Co. on royalty payments from its foreign subsidiaries or whether the entertainment giant exploited a loophole to avoid $4 million in corporate franchise taxes.

Disney wants the New York Court of Appeals to overturn an appeals court ruling that barred it from deducting payments from its foreign entities that produce and license intellectual property for tax years 2008 to 2011. Disney argued that the appeals court’s reliance on the fact that the foreign companies don’t add the payments back on their own state tax returns facially ...