Hyatt’s $71 Million Tax Assessment Bounced Back to Tax Court

Hyatt Hotels Corp. will get another chance to convince the US Tax Court that it doesn’t owe $71 million in taxes because payments franchisees made to participate in its customer rewards program weren’t income, after the Seventh Circuit vacated and remanded the case Wednesday.

The tax court should have considered whether excluding the nearly $300 million in payments was appropriate under the “claim of right” doctrine, which considers money to be income only when the taxpayer has no obligation to repay it, the US Court of Appeals for the Seventh Circuit ruled. The trust fund doctrine ...