Nordstrom Loses Tax Appeal In Md. Court

ANNAPOLIS, Md. (AP) -- Maryland's highest court has ruled that a subsidiary of Nordstrom Inc. can't use its own error to avoid more than $2 million in state taxes.

The Daily Record of Baltimore reports that the subsidiary argued that it was wrong when it declared deferred income for 2002 and 2003. It argued that it should have filed a separate Maryland tax return in 1999, when a court decision that dealt with income-sheltering subsidiaries would not have applied.

Judge Robert McDonald wrote Monday that the company made mistakes "as a result of transactions apparently devised to avoid state taxation." McDonald wrote that such errors don't mean the company doesn't have to pay taxes.

A landmark 2003 ruling by the court has curbed the practice of companies creating tax-sheltering subsidiaries in Maryland.