A tussle over taxes between the US government and a Port of Houston duty-free seller that provides cigarettes and alcohol to merchant ships has spilled over into bankruptcy court.
The US Tobacco Tax and Trade Bureau is fighting to keep intact it's claim that Gulf Coast Maritime Supply owes more than $8m to the federal government, continuing a fight that stretches back nearly six years.
The claim focuses on allegedly unpaid cigarette and alcohol taxes.
The agency has asked the Southern District of Texas court to step in to maintain the claim, arguing it requires the district's bankruptcy court to interpret non-bankruptcy law to determine its validity.
Since 2016, the bureau has maintained that when Gulf Coast founder Salem Geller died in August 2013, the transfer of his shares in the company to his wife Barbara Druss Geler constituted a change in ownership, requiring them to notify the government or apply for a new permit.
In April 2016, it terminated Gulf Coast's export warehouse permit and alleged the company had been operating without one for just under two years.
In a lawsuit that July, Gulf Coast argued that under Texas law, Salem Geller's shares were "community property," or jointly owned by both spouses, and that its permit should be restored. The company said it lost between $1.2m and $1.75m in sales.
In October 2016, the court sided with the bureau. The next month, Gulf Coast appealed and lost again. In December 2017, the company filed for bankruptcy.
