Pepsi Seeks Illinois High Court Review of Tax Avoidance Ruling

PepsiCo Inc. asked the Illinois Supreme Court to review a lower court’s determination that the company illegally set up a subsidiary as a tax shelter, arguing the ruling sets a “dangerous precedent” by applying the wrong law.

The Illinois Appellate Court, First Judicial District, affirmed in March that Pepsi created PepsiCo Global Mobility under Frito-Lay North America Inc. as a “shell corporation with no economic reality” in order to recognize $14 million per year in income tax savings in 13 states.

But Pepsi maintains that multinational companies frequently use expatriate programs to temporarily assign employees to international locations to solve ...