Court voids tax ruling that favored Gannett

PORTLAND – Maine’s highest court has sided with the state in its appeal of a ruling on media giant Gannett Co.’s liability for state income tax on its $2.5 billion gain from a national deal in which it sold its cable division in 2000.

The Supreme Judicial Court ruled unanimously Tuesday that Gannett’s cable, broadcast stations and newspapers constituted a unitary business and that taxing the company on an apportioned share of the income from the cable sale does not violate its due process rights.

Gannett, which owns the NBC-affiliated TV stations in Portland and Bangor, included income from the cable sale in its $1.2 million Maine tax payment for 2000, but later argued that the cable division was not a part of its unitary business. Tax officials denied a request for a $718,729 refund and the company took the matter to court.