Subway Franchisee Sues California Over $2 Million Tax Penalty

A Subway franchisee sued California for assessing interest and penalties beyond the $1.96 million it agreed to pay in a plea deal resolving earlier charges of tax evasion.

Ajay Beri Corp. satisfied its liability under the plea deal, but the California Department of Tax and Fee Administration tacked on another $2.05 million in fees and interest, the franchisee said in a California Superior Court complaint released Thursday. The company is seeking a full refund of the amount paid under the plea deal.

In addition to going beyond the plea agreement, the franchisee said the additional penalties are untimely. The disputed ...