Court Reverses Boeing Tax-Refund Ruling

The 9th U.S. Circuit Court of Appeals ruled that the government does not owe Boeing Co. more than $419 million in tax refunds, reversing a U.S. District Court decision. The dispute centered on Boeing’s accounting practices, which the 9th Circuit panel said led to a substantial understatement of the company’s net income from 1979 to 1987.

Writing for a three-judge panel of the San Francisco-based court, Judge David R. Thompson said the Internal Revenue Service computed Boeing’s income correctly when it linked the aerospace giant’s research-and-development costs to its export sales of commercial airplanes.

Boeing has 90 days to file an appeal, company spokesman Ken Mercer said.

Officials with the Justice Department’s tax division, which appealed the lower court’s ruling in April, declined to comment. Boeing’s stock closed down 18 cents at $58.82 on the NYSE.