The IRS says Medtronic used a Swiss subsidiary to improperly avoid paying certain taxes a decade ago. And now it wants the Fridley-based medical device maker to pay up to the tune of $53.6 million, MarketWatch reports. Medtronic disputes the bill and has requested a trial in U.S. Tax Court. The company says the IRS decision is based on rules that didn’t exist before 2005, nine years after it arranged the tax setup with the help of an outside economist. Technology companies often use similar methods overseas. Both Sens. John McCain and Barack Obama have suggested they’ll crack down on the practice.
The $5 latte is an obvious starting place when tightening a personal budget. And there’s percolating evidence that coffee shops might be losing their buzz in this economy. Caribou Coffee announced Tuesday that same coffeehouse sales dropped 4.7 percent during the three months ending Sept. 28. Bob Collins notes on his News Cut blog an article from Red Wing saying coffee shops there are seeing fewer customers and less-expensive purchases. My neighborhood’s coffee shop seemed eerily empty yesterday, too. How about yours?
Target sales missed the bull-s-eye again. The company announced today that net sales for September were up 2.5 percent from a year ago. But that’s only because it opened new stores since last year. Excluding new stores, same-store sales declined 3 percent, the company said. Making matters worse, more Target credit cardholders are not paying for the stuff they already bought. The Associated Press reports that retailers across-the-board are reporting dismal sales results as American shoppers “went into hiding in September.”
It was a familiar topic for Northwest Airlines CEO Doug Steenland, speaking at an executive leadership conference Tuesday in New York. The speech’s theme was managing through volatile times, he tells CNBC. Steenland said Northwest has always maintained very strong liquidity. That means it owns lots of assets and investments that can be turned into cash quickly if needed. As a result, the airline hasn’t had to enter the credit market in recent weeks. Steenland predicted, though, that financing new airplanes might be more difficult in the future.
The financial crisis appears to be hitting airlines where it hurts most: elite passenger bookings. A British Airways executive tells the Wall Street Journal that first- and business-class traffic between the world’s major banking centers (New York, London, Hong Hong, Tokyo) fell nearly 9 percent in September from a year ago. Most airlines declined to discuss specific passenger trends before they report third-quarter finances later this month. Elite frequent fliers account for 5 percent of Northwest’s passengers but provide 25 percent of the airline’s revenue.
Is there any good news out there today about Minnesota companies? If you have any, feel free to share in the comments section.
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