Laidlaw Hit With $141-Million U.S. Tax Bill
Laidlaw Inc. was hit with a $141-million tax bill after a U.S. court allowed a reassessment of the company’s American operations between 1986-88. The Canadian company, one of North America’s largest operators of ambulance and bus services, said a U.S. court ordered it to pay $49.6 million in back taxes and interest of about $91.4 million. U.S. Tax Court Judge John Colvin ruled that Laidlaw should have booked advances from its Dutch unit as equity rather than debt and therefore disallowed interest deductions for tax years 1986, 1987 and 1988. Laidlaw said it is studying the ruling and may appeal. “Frankly, we felt our evidence before Judge Colvin was compelling, and we believe his opinion is wrong,” Laidlaw President James Bullock said. Laidlaw also said other tax claims could mean it may owe as much as $500 million for the 1986-94 period. Laidlaw shares plunged $1.56 to close at $10.69 on the New York Stock Exchange.