Skechers $1 Million Wisconsin Franchise Tax Bill Survives Appeal

Skechers USA Inc.'s decision to hand over its intellectual property to a holding company was done solely for the sake of tax avoidance, an appeals court ruled in an unpublished opinion.

Skechers failed to prove the state misapplied the “sham transaction” doctrine, so the Wisconsin Tax Appeals Commission’s assessments exceeding $1 million are upheld, the unanimous Wednesday opinion from the Wisconsin Court of Appeals, Second District said.

Skechers challenged the Wisconsin Department of Revenue’s franchise tax assessment based on the agency’s determination that the footwear and apparel company improperly spun off Skechers USA Inc. II to manage its IP in ...