Pringles claims it mistakenly paid about $2.1 million in Tennessee taxes that the state has failed to refund.

The potato chip maker says it is owed a refund for sales and use taxes it paid on purchases that were tax-exempt. In a lawsuit filed with the Tennessee Chancery Court for Davidson County Dec. 28, the company said it sought a refund from the state Department of Revenue, but the agency failed to respond in a timely way.

Stephen Jasper, a tax attorney with the law offices of Bass, Berry & Sims in Nashville, told Bloomberg Tax Jan. 4 that the complaint appears to be a “placeholder” that Pringles filed as it continues to work with the DOR to resolve the matter. Jasper said he expects the parties to resolve the dispute, based on similar cases, and predicted Pringles could get at least some of the over-payment back.

Exempt Equipment, Supplies

Pringles said in its complaint that, from 2012 through 2015, it paid sales and use taxes on industrial machinery and supplies, packaging materials, rolling stock, delivery charges, and certain services, all of which should have been exempt from sales and use taxes. The company also claimed it paid sales taxes on purchases for which vendors had already collected and remitted taxes.

The company said it filed a refund claim with DOR on Dec. 30, 2016, but the department didn’t act within a six-month time period set by state law, so the claim was “deemed denied,” allowing Pringles to file a lawsuit to force the issue.

Jasper said the litigation at issue isn’t unusual, and the DOR typically continues to work with taxpayers to resolve such disputed issues. “My best guess from reviewing the complaint is that the case will be dismissed at some point in the near future after a refund is granted based on the exchange of information between the parties,” he told Bloomberg Tax.

Pringles is a subsidiary of Battle Creek, Mich.-based Kellogg Co., whose representatives didn’t immediately respond to requests for comment.

Representatives of the DOR and the state attorney general’s office declined to comment.

The case is Pringles Manufacturing Co. v Gerregano, No. 18-1411-IV, complaint filed 12/28/18.