The collection is from an undisclosed company - unnamed because of state tax confidentiality laws.

The REIT loophole issue, which focuses on the use of captive real estate investment trusts to avoid paying state corporate income taxes, has been in the national spotlight for going on two years now. In North Carolina, Wal-Mart saved millions of dollars in state tax bills by essentially transferring its properties to its own REIT and paying rent to itself, then writing it off as a tax deduction. These transactions were frequently followed by rather suspicious looking characters in black masks trudging back to Bentonville with big old gobs of money that could have gone to funding state programs.

North Carolina got wise to the scheme and assessed Wal-Mart for back taxes. Additional states have sought ways to close the loophole up, either through attacking it directly or by adopting combined reporting. Maryland is one of those states - last year Maryland Comptroller Peter Franchot announced that his state would no longer allow payments to captive REITs to be deducted from state tax returns. Now following its first publicized audit since then, Maryland will receive $10.8 million in back taxes for a 3-year period from the unnamed company.

We’ve chronicled again and again that Wal-Mart is one of the worst offenders in this area. Simply closing the loophole is one way to fix it. Adopting combined reporting is another. At least in Maryland’s case, the effort has already resulted in nearly $11 million coming back into the state treasury.

Maryland collects millions after closing tax loophole [Washington Post]

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Earlier this week, Wisconsin Public Radio hosted a discussion on state budget shortfalls, tax avoidance, and ways for states to make up lost revenue:

With the recent Wisconsin budget shortfall, lawmakers are examining ways to increase revenue. After nine, John Munson and his guests discuss the impact of corporate tax loopholes and how stopping them could help fix the state budget. Guests:
- Russ Decker, Wisconsin Senator (D-Schofield).
- Michael Mazerov, Senior Fellow, State Fiscal Project, Center on Budget and Policy Priorities, Washington, DC.

Check out the podcast. Wisconsin is currently one of the states that has gone after companies like Wal-Mart for avoiding corporate income tax, so the discussion is especially relevant there.