Creative Capitalism Gets Microsoft $528M Tax Break

NewsCloud writes "Microsoft makes products in Washington but records software sales to PC makers and high-volume customers through an operation in Nevada, where there is no corporate tax. So Washington has missed out on more than half a billion in taxes; revenue it could use for badly needed infrastructure needs — such as the needed replacement of the 520 bridge which connects Seattle ... to Microsoft. Reported by Slashdot in 2004, the numbers have increased with the company's growth to approx. $76M in savings last year alone. The author questions the legality of the practice given Microsoft's 35,500+ employees and 11.2 million square feet of real estate in Washington state."

Comments

How about Boeing?

[Exp315]

The other major business of Washington state - Boeing - flies their planes just outside the U.S. territorial limit offshore to sign the transfer papers with international customers so that they won't have to pay tax. Should we complain about them too?

Washington, the "soak the company" state...

[LynnwoodRooster]

Note that this is a complaint from the State of Washington (where I reside when in the US), the ONLY State that has the completely regressive and oppressive Business and Occupation Tax. A State tax on GROSS receipts. Yep, have $1,000 in revenue, but because you're a startup, or have a bad quarter or whatever, you lose $1,200 but STILL get the "luxury" of paying tax on that $1,000!

Ignore this story - Washington is taxing itself into oblivion. Boeing moved their corporate headquarters - and most of their taxable profit - to Chicago over the taxation and treatment of business in this State. The ONLY things that is keeping Washington alive right now are:

1. Agriculture. Hard to move a farm, so they're stuck. Of course, our State wants to breach all the dams and eliminate the irrigation systems, which would kill these businesses.

2. Boeing. Already moved their corp headquarters, and unfortunately for Boeing, the physical assets here - buildings, equipment, and people - are so huge that you can't afford to move them. But more and more work is shifted outside the State...

3. Microsoft. Faces the similar situation with Boeing, because of the size of the campus and people. Stuck for now, but does more and more outside the State.

Washington is screwed. It has the highest gas tax in the nation, and still hasn't repaired road damage from the 2001 Nisqually Earthquake. The legislature and governor raised the State budget by 33% in 3 years, and now projects deficits left and right, yet it's also decreased MANDATORY funding of the State employee's pension fund. And now it wants to put the screws to Microsoft...

Washington is dead, it just doesn't know it yet...

Re:So what?

[mh1997]

If Nevada is such a great, efficient state then I see no reason why Microsoft shouldn't move their actual operation there, instead of just maintaining a front for tax evasion purposes.

Why don't we really punish Microsoft? Let's kick them completely out of the USA! If the taxes aren't good enough for Washington, then Microsoft isn't good enough for Washington and therefore the USA. We should make them relocate to India and fire all their American employees! That would show those bastards. Then the next time some evil company wants to hire American workers while reducing their costs of doing business, they'll think twice because we took a stand for more taxes and less profits.

I for one will not stand for good paying jobs in the USA. Any candidate that encourages more tech jobs to move to India has my vote!

Re:So what?

[bmajik]

Amusingly enough, MS has paid a fair bit into King County municipal infrastructure issues. They bought a bigger fire truck (in exchange for being allowed to build a building taller than 4 stories). They built a bus transit center. I beleive they've had a part in paying to get bridges widened and other traffic improvements near the MSFT campus.

The MSFT employee base does a hell of a lot more for King County than the other way around.

WA politics are horribly corrupt and stupid.

Former Redmond resident, Current MS employee (in Fargo, ND, where the local government is much less stupid)

As an MS employee and shareholder, I hope we continue to diversify away from the Redmond campus. It is extremely expensive and the business climate in WA is unstable and increasingly hostile. The overwhelming majority of MS employees are transplants from elsewhere.

The nice thing about markets is that socio-economic conditions are a market also, and as US cities get stupider and stupider, they'll lose business and "lose" in the market place. Hopefully corrections occur before there is too much uncomfortable displacement for all parties.