Express Scripts Can’t Take $42.9 Million Deduction, DOJ Says (1)

A federal district court properly rejected Express Scripts Inc.‘s request for nearly $77 million in tax refunds over three years because the company’s software doesn’t qualify as a domestic production activity, the Department of Justice told an appellate court.

The pharmacy benefit management company’s claims adjudication software constitutes a service provided to customers so revenue derived from the software is ineligible for a tax deduction under IRC Section 199, the government said in a brief filed with the US Court of Appeals for the Eighth Circuit.

A lower court previously held that the same service stipulation prevented Express ...