A California appeals court has rejected Comcast's challenge to the $25 million tax bill the state imposed after the cable giant collected $1.5 billion from a failed merger deal in 1999.



In a 40-page decision posted by the state's Second Appellate Court in Los Angeles last week, less than two weeks after lawyers pleaded the case, two judges upheld a lower-court ruling that the $1.5 billion Comcast collected as a "termination fee" was taxable business income. Comcast collected the money after AT&T outbid Comcast's $60 billion offer for the MediaOne cable system. (It later acquired MediaOne when it bought AT&T's cable network.)



But after 17 years, the tax fight over the 1999 fee may not be over: "We are evaluating our options regarding California and the $25 million," John Demming, a Comcast spokesman, told me in an e-mail.