FleetBoston Financial Corp., the
seventh-largest U.S. bank by assets, is disputing an almost $20
million back tax bill from the state of Massachusetts, the Boston
Globe reported.
The tax disagreement, being reviewed by the state Appellate
Tax Board, comes as Fleet competes with five other banks for the
state’s cash-management contracts, the Globe said. Fleet receives
$4.5 million a year to manage almost all of the state’s cash
transactions. State law prohibits awarding a contract to a vendor
that is not in tax compliance, the newspaper reported.
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The tax case, which Fleet filed with the tax board June 30,
concerns allegations that BankBoston failed to pay corporate
excise taxes in 1996 and 1997 related to a real estate investment
trust that it established, the Globe said. BankBoston merged with
Fleet in 1999.
Including interest and penalties, the amount due totaled
about $19.7 million, the Globe reported.
State officials have accused dozens of Massachusetts banks of
setting up the real estate trusts as shell subsidiaries to avoid
large dividend tax payments, the Globe said. About 60 Massachusetts banks paid about $110 million to the state to settle
a dispute in June.
A Fleet spokesman, James Mahoney, told the Globe that the
bank remains in full compliance with tax requirements for the
contracts and that Fleet is still the best institution for the
job.
Bloomberg News
