South Carolina Judge Stands by CarMax Combined Returns Ruling

CarMax Auto Superstores Inc. failed to convince a South Carolina court Thursday to change its holding that the company and its related entities must file combined income tax returns to properly account for their income taxable in the state.

CarMax’s intercompany transactions “artificially and significantly reduce” one unit’s taxable income so that the state’s standard separate reporting and apportionment methods “abuse the state’s tax scheme,” the South Carolina Administrative Law Court held in a revised opinion.

• CarMax’s reconsideration motion caused Administrative Law Judge Ralph King Anderson III to rethink his reasoning on some issues in the original July 12 ...