Former pizza magnate Gene Bicknell has won a long-standing tax dispute with Kansas he says totals more than $63 million after the state Supreme Court on Friday ruled in the businessman’s favor, the culmination of a 16-year fight over the money.
The crux of the case centered on whether Bicknell was a Kansas or Florida resident in 2005 and 2006, the year he sold NPC International — at the time the largest owner of Pizza Huts in the world, with over 800 locations. In a unanimous decision, the Kansas Supreme Court ruled Bicknell was a Florida resident.
“While the procedural history is complex and the evidentiary record is enormous, the controlling legal question throughout the litigation has remained relatively simple — whether Gene was a Kansas resident for tax purposes in 2005 and 2006,” Justice K.J. Wall Jr., wrote in the opinion.
“We hold Gene was domiciled in Florida during those years.”
The Kansas Department of Revenue had maintained Bicknell was a Kansas resident. Bicknell, who has longtime ties to Pittsburg, had owned homes in both Pittsburg and Florida since the 1990s. Bicknell has said he has been a resident of Florida since 2003, and has filed nonresident income tax returns on earnings in Kansas.
“The Department of Revenue’s approach has always felt like extortion, forcing me and my family to endure hundreds of interrogatories, depositions, three trials, three appeals, 15 years of attorney time, and appearances before an agency board that was a kangaroo court,” Bicknell said in a statement Friday.
In 2007, KDOR initiated a review of Bicknell’s 2005 and 2006 tax returns after he sold NPC International. The review led to more than a decade of litigation, including two trials and three appearances in appellate courts.
At times, the lawsuits took bizarre turns. In one court filing, Bicknell said KDOR cited that he had visited family and friends in Crawford County, owned property there, installed a swingset at his Pittsburg house for his grandchildren and allowed a farm cat named Checkers to remain at the house as evidence he hadn’t left Kansas for Florida.
Bicknell also holds a reputation as something of a character. He wrote the book “Never Fry Bacon in the Nude,” with insights for entrepreneurs. He’s a musician. And he played a “Baseball Fury” in the 1979 film “The Warriors,” about battles between New York City street gangs — among other film roles.
Bicknell previously paid a $29 million tax bill, though he has always disputed it. In 2020, he said Kansas owed him $63 million — the original tax bill plus interest.
“I hope today’s decision prevents others from having to endure torment I have endured from the Department of Revenue over the past 15 years. Praise the Lord for Justice,” Bicknell said in his written statement.
Joan Wagnon, a former Kansas Democratic Party chair who was the state secretary of revenue when the review of Bicknell’s taxes began, said the agency had implemented new regulations to clarify the definition of residency.
“His case fell under that. That was the first big one that had a big, huge fiscal note,” Wagnon said.
At the time, Bicknell’s tax bill was a “huge amount of money,” Wagnon said, with the case unfolding amid the backdrop of the Great Recession, which led to budget cuts.
A few years ago, the size of the payment would have also caused a significant budget problem for Kansas because of revenue shortfalls while former Gov. Sam Brownback’s income tax cuts were in place. The state is now flush with cash, with a $3 billion ending balance possible next year, and will be able to easily absorb any payment due to Bicknell.
In 2016 the Legislature approved a bill that gave Bicknell a new day in court to fight the tax bill. Brownback vetoed the measure but lawmakers overrode him. The new law allowed any taxpayer appealing a decision by the Board of Tax Appeals to have a new trial in district court, where new evidence could be presented. The board is appointed by the governor to settle tax disputes.
“The Kansas Department of Revenue is currently reviewing the Supreme Court’s seventy-five-page decision and has no further comment on the matter,” Zach Fletcher, a spokesman for Gov. Laura Kelly, said in a statement.