Nordstrom in Tax Dispute

Baltimore Maryland tax authorities and Nordstrom Inc. are headed to state tax court Wednesday over a corporate income-tax dispute.

Maryland authorities say Nordstrom owes just over $1 million for corporate income taxes that the retailer put into holding companies registered in Delaware. Maryland's neighboring state charges no corporate income tax, and Maryland tax authorities routinely challenge companies they believe are hiding revenues in that state.

Last month, a Maryland tax judge awarded the state $1.1 million in corporate income taxes from a subsidiary of another apparel retailer, The Talbots Inc.

Maryland has assessed Nordstrom a total of $2.1 million for corporate income taxes the state believes was shifted to two Delaware holding companies. The total includes more than $1 million in taxes and a similar amount in interest and penalties.

In a statement, a Nordstrom spokesman said the retailer is contesting the charge. Spokesman Michael Boyd says Nordstrom pays millions in taxes to Maryland every year and does not believe it has evaded any payments. The sides meet in Maryland Tax Court on Wednesday.

Nordstrom has five locations in Maryland.