The lawsuit involves a claim for refund of payroll expense and gross receipts taxes and related penalties and interest for the tax year ended December 31 2018.

The Board of Supervisors authorizes the City Attorney to settle the lawsuit by the payment of $1,361,454.60, with International Business Machines Corporation and its related entities agreeing to take certain filing positions on gross receipts taxes for tax year 2019 and subsequent years, without the City imposing penalties for those filing positions for tax years 2019 through 2022.

The settlement results in IBM receiving a refund and avoiding penalties for specific tax positions from 2019 through 2022.

Not explicitly stated, but the settlement likely offers a resolution to the litigation and an assurance for the City regarding IBM's future tax filings.

The Board of Supervisors authorizes the settlement pursuant to Charter Section 6.102(5) directing the City Attorney to carry out the settlement.

The settlement terms provide accountability through the agreement on the filing positions that IBM and its related entities will take for future tax years and the City's abstention from imposing penalties.