SALEM, Ore. (CN) – Stewart Title Co. says Oregon illegally demanded that it pay $200,000 in “retaliatory tax,” 10 years after a judge told the state that its demand for the tax was “simply incorrect.”
The title company claims that Oregon’s recent demand is a rehash of a demand it made a decade ago, when the Marion County Court “agreed with Stewart Title’s plain reading” of Oregon’s retaliatory tax statute, and “rejected” the state’s interpretation as “simply incorrect.”
Stewart Title sued the state and its Department of Consumer and Business Services in Marion County Court – the same court that issued the ruling between the same parties 10 years ago.
“Now, a decade later, the Department has billed Stewart Title for an amount of ‘retaliatory’ tax based on its very same judicially rejected interpretation of the Retaliatory Tax Statutes,” the complaint states. “This billing also directly contradicts promises the department made to Stewart Title upon which Stewart Title reasonably relied.”
Stewart Title challenges the state tax on “foreign domiciled” insurance companies. It claims that it is licensed to conduct business in Oregon, and works with and through Oregon-based agents who retain a “significant portion” of the money generated in the state.
Stewart claims the department not only misinterpreted Oregon law, it misinterpreted Texas law when calculating the taxes, by including “fees transactions that were not the business of insurance,” such as title searches and examination services.
“The Retaliatory Tax Statutes do not empower the department to access retaliatory taxes against Stewart Title for amounts paid to or retained by its agents in Oregon for title search and examination work,” the title company says.
And it says the tax is unconstitutional, as it does not apply to all insurers in the same manner.
Stewart Title says the state assessed the tax as “a revenue raising measure,” but the state does not get “a second bite at the apple.”
Stewart Title seeks declaratory judgment. It is represented by G. Kevin Kiely with Cable Huston Benedict Haagensen & Lloyd, of Portland.