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Robert Redford sues New York over Sundance Channel tax bill

By Jonathan Stempel

NEW YORK (Reuters) - The actor and director Robert Redford has sued New York state to stop it from trying to collect $1.57 million in personal income taxes over his 2005 sale of a stake in the Sundance Channel.

In a complaint filed on July 31 against the New York State Department of Taxation and Finance in a state court in Albany, Redford, 77, claimed he already "fully" paid state taxes on the sale in Utah, where he is a resident.

The star of "The Sting" and Oscar-winning director of "Ordinary People" said New York is effectively trying to tax him twice. He is seeking a court order to void the tax bill and recoup costs.

State tax commissioner Thomas Mattox was also named as a defendant. Geoff Gloak, a tax department spokesman, said that office does not discuss litigation. A spokeswoman for Redford declined to comment.

According to the complaint, Redford in 2005 owned an "S" corporation known Sundance TV Inc, through which he held an 85.5 percent stake in Sundance Television Ltd.

Redford said Sundance Television that year sold part of its 20 percent stake in Sundance Channel, triggering a gain that he included on his 2005 Utah tax return.

He said New York nonetheless in May sent him a bill for $845,066 in taxes plus $723,404 in interest, treating proceeds from the sale as "New York source income."

Redford said this is wrong, and that neither he nor the Sundance entities did anything in New York to trigger the bill.

He also said he had sold the rest of his Sundance Channel stake in 2008 and reported the resulting gain in the same manner, without objections from New York.

S corporations pass on profits and losses to shareholders, who then report them on their personal income tax returns.

Redford is also the founder and driving force behind the annual Sundance Film Festival, which spotlights independent films.

The case is Redford v. New York State Department of Taxation and Finance et al, New York State Supreme Court, Albany County, No. 003974/2014.

(Editing by Eric Walsh)

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