Safeway announced yesterday (10 April) that it has settled a tax refund claim with the Internal Revenue Service. As a result, the retail operator anticipates receiving a refund of approximately US$315m in the second half of 2006.
The settlement relates to Safeway’s claim for refunds between 1992 and 1999 for costs associated with debt financing. The refund is expected to total $259m including an additional $56m in accumulated interest.
The company added that it has similar claims for refunds of income tax and interest in several states. As of 7 April 2006, the company expects these state income tax refunds and interest will be approximately $30m and $10m, respectively, net of income tax. Collection of these funds may take several years, Safeway said.