February 16, 2019

Corporate Taxes in Florida

Cease Fire: HCA and Florida Department of Revenue reach tax-battle truce

Jason Garcia | 4/12/2016

Hospital chain HCA Inc. and the Florida Department of Revenue have settled a years-long corporate-income tax battle worth more than $60 million.

Under the terms of the settlement, obtained by Florida Trend through a public-records request, the revenue department has stopped pursuing $28.1 million in back taxes that it once said HCA illegally evaded. At the same time, Nashville, Tenn.-based HCA has dropped claims for $32.4 million in refunds for taxes it said it had mistakenly overpaid.

The dispute involved three lawsuits and covered more than a decade of HCA’s Florida tax returns, from 2001 to 2012. It centered on various strategies HCA has used to lower its Florida tax bills, including passing billions of dollars between subsidiaries – in the form of intra-company insurance premiums, loans, management fees and more – in order to reduce the percentage of its profit that Florida could tax. The battle was the subject of the story “Tax War” in the February 2016 issue of Florida Trend.

Emails show the settlement was first broached in a Feb. 25 meeting involving, among others, HCA accountants and former Department of Revenue Executive Director Marshall Stranburg. During that meeting, HCA’s representatives said they “could agree to a wash” in order to resolve the cases.

The settlement was executed March 28th, with signatories including R. Lee Grubbs, HCA’s vice president for tax. HCA withdrew its suits against the revenue department two days later. Stranburg formally exited the department two days after that, on April 1, to begin a new job with the Multistate Tax Commission in Washington, DC.

A portion of the settlement was redacted by the Attorney General’s Office, and it is unclear whether or how the agreement will affect the ability of HCA – or other companies – to use similar tax-reduction techniques going forward. A spokeswoman for the Department of Revenue said she could not answer the question. A spokesman for HCA did not respond to a request for comment.

Tags: Politics & Law, Banking & Finance, Government/Politics & Law, Healthcare

Digital Access

Add digital to your current subscription, purchase a single digital issue, or start a new subscription to Florida Trend.

An overview of the features and articles in this month's issue of Florida Trend.


Florida Business News

Florida Trend Video Pick

Miami Yacht Show to open in its new location
Miami Yacht Show to open in its new location

The 31st Miami Yacht Show, the city’s premier luxury yacht show, takes place from February 14 -18, 2019 in its new location at One Herald Plaza. See a video of preparation for the event.

Earlier Videos | Viewpoints@FloridaTrend

Ballot Box

Have you ever been the victim of a cyber crime?

  • No
  • Yes

See Results

Ballot Box