IBM Royalty Tax Ruling Should Stand, New York Tells High Court

New York’s highest court shouldn’t give International Business Machines Corp. a “windfall” by allowing it to deduct royalties that its foreign affiliates didn’t add back on their own state tax returns, the state argued.

IBM wants the New York Court of Appeals to overturn an intermediate court’s March ruling that it’s on the hook for over $64 million in corporate franchise taxes, plus $14 million in interest and over $6 million in penalties. The company argues it should be able to deduct royalty payments it received from its foreign subsidiaries that produce and license intellectual property on its 2011 and ...