NY Defends $41 Million Franchise Tax Bill Against Hotel Rehabber

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New York's tax department is defending a $41.4 million franchise tax assessment against Cushlin Ltd., an Isle of Man-based company that refurbishes luxury hotels. The state says Cushlin failed to file tax returns or provide requested documents for tax years 2002 to 2008, leading the Division of Taxation to estimate the company's tax liability. Cushlin has asked a state appeals court to overturn the tax tribunal's ruling upholding the assessments.

Why it matters

This case highlights the ongoing tension between state tax authorities and multinational companies over tax compliance and transparency. New York is seeking to collect what it views as owed taxes, while the hotel rehabber is fighting the assessment.

The details

After Cushlin Ltd. failed to file tax returns or provide requested documents, the New York Division of Taxation estimated the company's tax liability for the 2002-2008 period at $41.4 million, including taxes, interest, and penalties. Cushlin has challenged the assessment, arguing the state took too long to conduct the audit.

• The tax assessment covers the years 2002 to 2008.
• Cushlin appealed the tax tribunal's ruling upholding the assessments in 2025.

What’s next

The New York Supreme Court, Appellate Division, Third Department will rule on whether to overturn the tax tribunal's decision upholding the $41.4 million assessment against Cushlin Ltd.