The Iowa Supreme Court has upheld a decision to levy corporate income taxes against fried chicken giant KFC.
At question is whether the state can impose income tax on revenue received by a company that doesn't have a presence in Iowa. KFC doesn't own any restaurants or have employees in Iowa. All KFC's in the state are owned by independent franchisers.
The Iowa Department of Revenue and Finance assessed KFC more than $248,000 for unpaid corporate income taxes in 2001.
Mark Schuling, the agency's director, says any corporation that collects revenue in Iowa should pay taxes.
KFC Corp., whose parent company is Louisville, Ky.-based Yum Brands Inc., challenged the assessment saying under Iowa law it was not subject to taxes because it didn't have property in the state.