In an agreement reached between Purdue Pharma and the state of Oklahoma, the drugmaker agreed to pay $270 million to start a new foundation and a research center for pain and addiction. Because the money will go to a foundation, Purdue Pharma can write off the payment as a charitable deduction, according to USA Today.
A settlement agreement between Teva Pharmaceuticals and the state of Oklahoma specifies that payments would be for restitution, not a penalty. Teva did not concede any liability and denied wrongdoing. Penalties for wrongdoing are typically not tax-deductible, but a restitution is.
A settlement between McKesson and West Virginia also specified that the transaction was not a penalty, so that it could be tax deductible.
Tax law experts told USA Today the settlements all seem to be structured so the companies can write off at least part of the payment. They added that these kinds of write-offs could hurt the average taxpayer by forcing them to pay more in taxes, face cuts to public programs and add to the national debt.
Read the full article here.
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