US sues Buffett's NetJets unit for unpaid taxes

Fri Mar 9, 2012 4:27pm EST

* IRS says Berkshire's NetJets owes $366.3 mln

* Berkshire sued for $642.7 mln over errant "ticket tax"

* NetJets declines to discuss litigation

By Jonathan Stempel

March 9 (Reuters) - NetJets Inc, a private jet-sharing company owned by Warren Buffett's Berkshire Hathaway Inc , was sued for $366.3 million by the U.S. government to recover unpaid taxes, four months after sued the government for nearly twice as much.

Four NetJets units have "failed, neglected or refused" to pay excise taxes and related penalties between 2003 and 2009, according to the countersuit filed Thursday with the U.S. District Court in Columbus, Ohio, where NetJets is based.

NetJets Aviation Inc owes $302.1 million, NetJets International Inc owes $53 million, Executive Jet management Inc owes $10 million and NetJets Large Aircraft Inc owes $1.19 million, according to the countersuit.

Colleen Nissl, NetJets' general counsel, said the company does not comment on pending litigation.

On Nov. 14, NetJets had sued to recoup $642.7 million in taxes and penalties, accusing the Internal Revenue Service of having mistakenly imposed a "ticket tax" meant to apply only to passengers who buy seats on commercial or charter aircrafts.

NetJets said that as a manager of private aircraft, it was not required to pay the tax because its services were not "taxable transportation." It also said the IRS put it at a disadvantage to rivals that did not have to pay the tax.

Last year, NetJets posted a $227 million pretax profit, continuing a turnaround after prior management had racked up $1.9 billion of debt and regularly posted quarterly losses.

"A few years ago NetJets was my number one worry: Its costs were far out of line with revenues, and cash was hemorrhaging," Buffett, the world's third-richest person according to Forbes magazine, wrote last month in his annual letter to Berkshire shareholders. "These problems are behind us."

Berkshire is based in Omaha, Nebraska.

The case is NetJets Large Aircraft Inc. v. U.S., U.S. District Court, Southern District of Ohio, No. 11-01023.

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Comments (1)
WordJazz wrote:
Please check the first graph, e.g.

Reuters) – NetJets Inc, a private jet-sharing company owned by Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) (BRKb.N), was sued for $366.3 million by the government to recover unpaid taxes, four months after (it) sued the government for nearly twice as much. It needs the “it” in there, right? Kind regards, WordJazz

Mar 10, 2012 11:46am EST  --  Report as abuse
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