The U.S. Tax Court confirmed Coca-Cola's tax debt to the Internal Revenue Service on Friday, and the beverage company agreed to pay over $6 billion in taxes and interest — while vowing to appeal.
This is the latest step in a long-running dispute between Coca-Cola and the IRS over how the company calculates the U.S. income of foreign subsidiaries.
The original tax debt in question — from 2007, 2008 and 2009 — amounted to roughly $3.3 billion, but with interest, the amount owed has reached $6 billion
The case has been with the U.S. Tax Court since October 2015, after the IRS informed Coca-Cola in September of that year that it intended to reallocate more than $9 billion of foreign affiliates' income to the U.S. parent company, rejecting what the company described as "a previously agreed-upon methodology without prior notice."
In two separate rulings in 2020 and 2023, the Tax Court sided with the IRS, and issued its final two-sentence ruling and order on Friday.
"Coca-Cola strongly believes the IRS and the Tax Court misinterpreted and misapplied the applicable regulations involved in the case and will vigorously defend its position on appeal," the company said in a statement, noting that it "believes it will prevail on appeal with respect to the issues raised in both the 2020 and 2023 Tax Court opinions."
The company has 90 days to file a notice of appeal with the Eleventh Circuit Court of Appeals.
