Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  The Pakistan Stock Exchange  >  Packages Limited    PKGS   PK0010001011

PACKAGES LIMITED

(PKGS)
  Report
End-of-day quote. End-of-day quote The Pakistan Stock Exchange - 09/21
510.37 PKR   -2.11%
07/10PACKAGES : Transaction of 26,500 shares of Packages Limited
AQ
07/10PACKAGES : Transaction of 11,700 shares of Packages Limited
AQ
07/10PACKAGES : Transaction of 200 shares of Packages Limited
AQ
SummaryChartsNewsCalendarCompanyFinancials 
SummaryAll NewsPress ReleasesOfficial PublicationsSector news

Companies must pay taxes on severance payments: U.S. high court

share with twitter share with LinkedIn share with facebook
03/25/2014 | 01:48pm EDT
The exterior of the U.S. Supreme Court is seen in Washington

WASHINGTON (Reuters) - The U.S. Supreme Court ruled on Tuesday that taxes are due for Social Security and Medicare on severance packages paid to workers who are laid off involuntarily, overturning a lower court ruling that could have led to a wave of payroll tax refund requests from U.S. businesses.

In a win for the Obama administration and the U.S. Internal Revenue Service, the court voted 8-0 that Quality Stores Inc., a defunct retailer, and its employees are not entitled to tax refunds totaling about $1 million.

The tax refund at issue was small, but the IRS said the stakes in the case were huge because, if Quality Stores had won, thousands more refund claims could have resulted, possibly totaling as much as $1 billion.

If Quality Stores had won, many companies were ready to file for tax refunds, said Ruth Wimer, a partner at the law firm McDermott Will & Emery LLP, calling the decision "bad news" for employers and employees.

The dispute centered on whether severance paid to involuntarily terminated workers was taxable under the Federal Insurance Contributions Act tax, or FICA, which helps pay for Social Security pensions and Medicare health insurance for the aged. FICA tax is paid by a company and its employees.

In September 2012, the 6th U.S. Circuit Court of Appeals ruled that Quality Stores' severance payments to its former employees were not wages and so were not taxable under FICA.

That decision was overturned by the Supreme Court, with Justice Elena Kagan recused in the case. "Under FICA's broad definition, these severance payments constitute taxable wages," said Justice Anthony Kennedy, in an 18-page opinion.

SEVERANCE IN TAX GRAY AREA

Quality Stores served farmers and small-town people in 300 locations. It declared bankruptcy in 2001 and laid off thousands of workers with severance pay. The company withheld FICA tax from the severance and sent the withholdings to the IRS.

In oral arguments before the high court in January, the IRS and Quality Stores argued over seemingly contradictory language in the tax code related to severance pay and FICA taxes.

One part of the code defines wages as "all remuneration for employment." But in a different code section, "supplemental unemployment benefits (SUB)" are exempted from income taxes.

Quality Stores argued that its severance payments were exempt from FICA tax under the "SUB payments" definition.

The Supreme Court dismissed this argument.

"Severance payments are not exempted, and they squarely fall within the broad textual definition of wages for purposes of income-tax withholding," the court said.

(Editing by Kevin Drawbaugh and Grant McCool)

By Lawrence Hurley and Patrick Temple-West

share with twitter share with LinkedIn share with facebook
All news about PACKAGES LIMITED
07/10PACKAGES : Transaction of 26,500 shares of Packages Limited
AQ
07/10PACKAGES : Transaction of 11,700 shares of Packages Limited
AQ
07/10PACKAGES : Transaction of 200 shares of Packages Limited
AQ
07/09PACKAGES : Transaction of 8,600 shares of Packages Limited
AQ
07/09PACKAGES : Transaction of 6,200 shares of Packages Limited
AQ
06/25PACKAGES : Transaction of 5,200 shares of Packages Limited
AQ
06/25PACKAGES : Transaction of 40,170 shares of Packages Limited
AQ
06/25PACKAGES : Transaction of 7,400 shares of Packages Limited
AQ
06/25PACKAGES : Transaction of 33,000 shares of Packages Limited
AQ
06/24PACKAGES : Transaction of 19,200 shares of Packages Limited
AQ
More news
Financials
Sales 2019 60 906 M 368 M 368 M
Net income 2019 153 M 0,92 M 0,92 M
Net Debt 2019 30 992 M 187 M 187 M
P/E ratio 2019 233x
Yield 2019 3,01%
Capitalization 45 617 M 275 M 276 M
EV / Sales 2018 1,19x
EV / Sales 2019 1,09x
Nbr of Employees -
Free-Float 100%
Chart PACKAGES LIMITED
Duration : Period :
Packages Limited Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends PACKAGES LIMITED
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Managers
NameTitle
Syed Hyder Ali Chief Executive Officer, Executive Director & MD
Towfiq Habib Chinoy Chairman
Khurram Raza Bakhtayari Chief Financial Officer
Afzal Muhammad Head-Group Information Technology
Syed Aslam Mehdi Executive Director
Sector and Competitors
1st jan.Capitalization (M$)
PACKAGES LIMITED28.00%275
INTERNATIONAL PAPER COMPANY-10.88%16 133
YUNNAN ENERGY NEW MATERIAL CO., LTD.78.51%11 589
PACKAGING CORPORATION OF AMERICA-3.54%10 172
MONDI PLC-14.22%9 426
WESTROCK COMPANY-17.99%9 137