California Seeks to Nix Theater Heirs’ $5 Million Tax Windfall

Trusts established for descendants of Century Theaters Inc. founder Raymond Syufy were improperly awarded a California income tax refund of more than $5 million based on faulty calculations, a state tax agency told an appeals court.

The Franchise Tax Board is asking the California Court of Appeal, First Appellate District, to overturn a trial court’s January ruling that the state owes the 157 trusts $5.39 million, plus interest, on taxes paid on the $524 million gain from the sale of the movie theater company in 2007.

“The trial court misconstrued the law,” the FTB argued in its opening brief, ...