SACRAMENTO, Calif. — A decades-long fight over a massive tax bill between California and a computer chip inventor has been resolved — mostly in the inventor’s favor.
The state had said Gilbert Hyatt, now nearly 80, owed it several million in taxes dating back to a dispute from the early 1990s over whether he falsely claimed Nevada residence to avoid them.
On Tuesday after a 13-hour meeting, a state board that rules over tax disputes found in a 3-2 vote that Hyatt did live in Nevada for most of the disputed time frame, but was still operating his business out of California for several months.
Hyatt owes roughly $1.9 million, plus yet-to-be-calculated interest dating back to 1992. That’s far lower than the original $13.3 million the Franchise Tax Board tried to charge him — a figure that could have swelled to $55 million with penalties and interest.
“Thank you so much,” Hyatt told the Board of Equalization after the meeting, according to the Sacramento Bee (http://bit.ly/2iJiR5e). “After 26 years or more, finally over with.”
The tax dispute took many forms in many venues. At one point a Nevada court ruled that the state of California actually owed Hyatt millions in damages for fraud and invasion of privacy as they zealously pursued him for the tax bill. Hyatt had accused the tax agency of outrageous behavior by sending officials to peer through his windows, contact estranged family members and sharing his personal information with business contacts.
The U.S. Supreme Court last year reduced the figure to just $50,000. The Supreme Court also ruled that the Nevada lawsuit could continue, but it wasn’t clear after Tuesday whether that would happen.
Hyatt claimed he moved from Orange County to Las Vegas in 1991, just before collecting $40 million in patent fees for developing a computer microprocessor chip.
But California auditors found that he sold his house to a friend without using a real estate agent then made frequent trips back to the home. They said evidence showed he had held meetings and sent and received faxes from his former home.
Hyatt said much of that evidence was simply a case of his new address not immediately getting to everyone he did business with. “I don’t understand how anyone in good faith could argue that I was a California resident during the disputed period,” Hyatt told the board.
Information from: The Sacramento Bee, http://www.sacbee.com