Drug Company Gets Nearly $3 Million Corporate Tax Bill Nixed

Pharmaceutical manufacturer Perrigo Sales Corp. can be charged commercial activity tax based on the sales price instead of the list price of generic drugs, mostly reversing an approximately $3 million assessment, an Ohio tribunal held.

Perrigo sold its products to wholesalers at a wholesale acquisition price that didn’t reflect the final sales price to consumers—and the wholesalers returned the difference, known as chargebacks, to Perrigo, the Ohio Board of Tax Appeals said Thursday. So the state tax commissioner must instead impose the CAT on the sales price because that’s what Perrigo actually sells for, the opinion said.

• “Because Perrigo never ...