San Francisco’s Refund to Macy’s Is Cut by Court

A California appeals court slashed a refund that San Francisco owed Macy’s by millions of dollars, despite the retailer’s successful challenge to a local business tax.

Macy’s, a unit of Federated Department Stores Inc., won a ruling in 2004 that a business tax imposed by the city in the 1990s was unconstitutional. A Superior Court judge had granted the retailer’s request for a refund of the $13 million in business taxes it paid while the ordinance was in effect.

But the 1st District Court of Appeal in San Francisco ruled that the retailer was entitled to recover only the several hundred thousand dollars by which it might have been overtaxed.