Jon Campbell

Gannett

ALBANY, N.Y. – Legendary actor Robert Redford is suing the state of New York over a $1.6 million tax bill related to the 2005 sale of a television channel.

Redford, who starred in such films as All the President's Men and Butch Cassidy and the Sundance Kid, sold a 20 percent stake in the Sundance Channel in 2005. Later, the state Department of Taxation and Finance audited the channel's filings and claimed Redford owed $845,000 in state taxes and $723,404 in interest.

In the lawsuit filed last week, Redford's attorney claims the actor paid the proper taxes in his home state of Utah. The Sundance Channel is a limited liability company registered in New York, but Redford's stake in the company was through what is known as an "S corporation," which requires shareholders to claim losses or gains on their income-tax returns.

"(Redford) did not use his ownership interest … in any trade or business carried on by him in New York," according to the lawsuit. "Further, (Redford) did not have any property, payroll or receipts located in or deemed attributable to the conduct of a trade or business in New York."

Redford's attorney, Stephen Solomon, did not immediately return a call seeking comment Wednesday. A spokesman for the state Department of Taxation and Finance declined comment, citing a policy of not discussing pending litigation.

The lawsuit, which was filed in state Supreme Court in Albany County, asks the court to toss the outstanding tax bill. Redford, 77, is also seeking fees for his attorneys.

Redford helped found the Sundance Film Festival — held each year in Park City, Utah — in 1978, serving as the festival's first chairman. He helped launch the Sundance Channel in 1996.

Campbell reports for Gannett's Albany (N.Y.) bureau