MONTPELIER, Vt. (AP) – The Vermont Supreme Court says TD Banknorth must pay nearly $6 million to the state of Vermont in back taxes, interest and penalties, saying the bank set up three sham holding companies to avoid paying taxes due in 2000 and 2001.

The high court’s ruling on Friday affirms a Vermont Superior Court ruling and is expected to provide the state a much needed shot of revenue already spoken for in the fiscal 2009 budget.

A spokeswoman for the Portland, Maine-based bank says it believed it was complying with applicable laws, and is disappointed with the ruling but will comply.

Tax Commissioner Tom Pelham says his department’s auditors got on the case in 2004 after noting a sharp drop-off in revenues from the state’s bank franchise tax.


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