Judge drops Kmart suit over local taxes

Tuesday, April 20, 2004 | 10:44 a.m.

SUN STAFF AND WIRE REPORTS

TROY, Mich. -- A federal judge in Chicago has dismissed a lawsuit filed by Kmart that claimed hundreds of towns, cities and counties nationwide overcharged the discount retailer millions of dollars in property taxes.

In an order issued Monday, Judge Jack Schmetterer said Kmart failed to explain why U.S. Bankruptcy Court would have jurisdiction in the case. But Schmetterer left the door open for Kmart to refile the suit.

Troy-based Kmart was disappointed by the judge's decision to dismiss the suit.

"We stand by our claims to pursue fair valuation of our taxes, and we are reviewing our legal strategy," chief executive Julian Day said in a statement.

Shares of Kmart rose $1.08 to $47.43 in morning trading on the Nasdaq Stock Market.

States with communities named in the suit included Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Georgia, Idaho, Kansas, Louisiana, Michigan, Missouri, Mississippi, Montana, Nevada, New Mexico, North Carolina, Oklahoma, Oregon, Rhode Island, Tennessee, Texas, Washington, Wisconsin and Wyoming.

In Las Vegas, the Clark County tax assessor's office was one of the local taxing authorities sued by the discount retailer. On Jan. 26 the Clark County assessor's office presented its motion before Schmetterer to either dismiss the lawsuit or refrain from hearing evidence in the case.

Clark County tax assessor records show the company paid $201,000 in personal property taxes to Clark County for the 2001-2002 and 2002-2003 tax years. Kmart has nine stores in the Las Vegas area.