Computer Chip Inventor Wins Epic Tax Battle In California–Sort Of

By Amy Lamare / Posted on September 12, 2017

In 1990, Gilbert Hyatt invented a computer chip and was awarded a patent for it.  Hyatt’s patent was later invalidated but not before he made a mint in royalties. The inventor is now nearly 80 years old and for the past 26 years has been battling California’s Board of Equalization and Franchise Tax Board over unpaid taxes dating back to the early 1990s. State tax collectors accused Hyatt of lying about a move to Nevada just as the money for his patent started to roll in. The case was recently in court and was settled mostly in Hyatt’s favor.

The California Board of Equalization was split on their vote as to whether Hyatt’s business was founded and operated out of California for several months after his alleged move to Nevada. The final decision was 3-2 in favor of believing that Hyatt had left California.

Going into the hearing Hyatt was on the hook for at least $55 million in taxes, penalties and interest. The original tax bill was $13.3 million from 1991 and 1992. Penalties and interest compounded it. Hyatt is now responsible for $1.9 million in taxes owed from 1991 as well as interest that has built up since that time.