Bayer Loses Tax Fight in West Virginia

(MoneyWatch)  Kanawha County, W.V., has won a years-long court battle against Bayer to get the drug company to pay its taxes properly. West Virginia's Channel 3 reports:

Bayer Corp. could soon get a formal request from Kanawha County officials for almost $91,000 in taxes erroneously refunded to it more than five years ago.

Kanawha County Commission President Kent Carper says commissioners will be asked on Thursday to send the company a bill for $90,907.

In November, the West Virginia Supreme Court upheld a lower court ruling that overturned the commission's decision to grant Bayer relief for taxes paid in 2001, 2002 and 2003.

Justices also rejected two appeals filed by Bayer that claimed the state tax commissioner had over-assessed its South Charleston and Institute facilities in 2006 and 2007.

What is interesting is the back story. Why would Bayer spend all that money on legal bills just over a a $90,000 tax invoice? Because, according to HuntingtonNews.Net, Bayer cannot count.

When the company acquired its Kanawha County site, its inventory and accounting procedures became riddled with errors. There was, a judge on the case ruled, "a general lack of knowledge about what [Bayer] was acquiring and what [it] owned." The judge concluded:

[T]his court has determined that the accounting discrepancies were the result of negligence rather than clerical error or mistake.

Bayer's own brief to the Supreme Court states that Bayer's errors included:

[R]eporting inventory data for the wrong month, reporting raw materials as finished goods, [and] reporting materials as being in inventory that were actually in transit and had not yet arrived in Kanawha County.

The errors led to Bayer overpaying, which led to the refund. The new ruling means the refund must be paid back.

But don't worry too much about Bayer -- it just won a tax abatement from Muskegon, Mich., to build a new herbicide plant.