FOR IMMEDIATE RELEASE

Comptroller Franchot Claims Another Victory Against Corporate Tax Scofflaws

Comptroller's Office Collecting More Than a Million Dollars from Nordstrom, Inc.

Annapolis, MD (October 27, 2008) - Comptroller Peter Franchot announced today that subsidiaries of the popular retail chain Nordstrom, Inc. were found liable to Maryland for corporate income taxes due from tax years 2002 and 2003. The Maryland Tax Court ordered Nordstrom to pay the state $1,264,864 in back taxes plus interest and ten percent in penalties. This case was the most recent victory for the Comptroller's office in an aggressive effort to crack down on corporations avoiding taxes using Delaware Holding Company tax schemes and other tax avoidance strategies. To date, the Comptroller's office has collected more than $267 million in taxes through Delaware Holding Company cases, and has an additional $143 million in outstanding assessments against corporations using this tax-avoidance system.

"The vast majority of Maryland businesses are playing by the rules and we will not allow a few large corporations to gain an unfair competitive advantage by flouting our tax laws," said Comptroller Peter Franchot. "This case represents another positive step in the battle against tax avoidance schemes such as the Delaware Holding Company and captive REIT ploys. I am committed to ensuring that everyone pays their fair share and helps us through the tough fiscal times we find ourselves in."

During its auditing process, the Comptroller's Office found the retail chain to be liable for taxes due for tax years 2002 and 2003. Nordstrom, Inc. petitioned the court to revise the comptroller's assessment of taxes with no success. The court found the company liable based on the presence of the parent within Maryland and the fact that the subsidiaries had no economic substance.

This recent ruling comes just a few short weeks after an appellate court ruled in favor of the Comptroller's Office against Classics Chicago. That corporation, the parent company to Talbots, Inc., was found liable for their corporate income tax for 11 years from 1993 to 2003. In addition, the Comptroller recently announced a payment of over $10 million from a company found using the now closed captive REIT loophole. Nordstrom, Inc. has 30 days to appeal the decision.

Contact: Joseph Shapiro, 410-260-7305 (office), 443-871-2244 (cell)