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Microsoft Tax Dodge At Issue In Washington State
newscloud writes "With Washington State facing a billion-dollar biennial budget deficit, the spotlight again shifts to Microsoft's software licensing office in Reno, Nevada. 'Although the majority of its software development is performed in Washington State, Microsoft records its estimated $18 billion in licensing revenue per year through a corporate office in Reno, Nevada where there is no licensing tax. Just by enforcing the state's existing tax law from 2008 onwards, we could reduce Washington's revenue shortfall by more than 70 percent. Alternately, we could pursue the entire $707 million from Microsoft's thirteen years of tax dodging and cover most of the expected deficit going forward.' We have discussed Microsoft's creative capitalism in the past."
No state income tax. Instead, WA taxes the shit out of small business. It can be especially hard on retailers because the state B&O tax is based on gross revenue, not profit. In other words, it is totally possible to run a money losing business and owe taxes on top of that. As a small business owner in WA (profitable thankfully), this story has me totally pissed.
What changed under Obama? Nothing Good
Washington has no income tax.. That is the point..
What is the state income tax like there?
I can't speak to any of your other questions, but Washington state has no income tax (yet).
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As the Supreme Court has made clear:
tax avoidance != tax evasion
The first is legal. The second... not so much.
They've done a lot of that, too. For example, they cut the University of Washington's budget by 13%, which resulted in a 14% increase in tuition rates, and severe cuts to many graduate departments, etc., which necessitates a reduction in the number of classes taught. So, we're accepting fewer students and depressing the graduation rates of those who are already here. That provided the state with an extra $73M for their budget.
Similarly, King County is cutting almost all of the fat. County health is getting cut, county parks are getting cut, etc. So, in the impoverished unincorporated areas, we're cutting all public service, except for courts and police. I can't recall what that cut netted us, but it was on the order of a few million, and the County is still coming up short.
And we've got a case of blatant tax evasion to the tune of $700M. Yeah -- let's stick it to the poor people and the college kids and protect our holy corporations who do no wrong...
...many companies incorporate in Delaware for the tax breaks they get, even while most of their manufacturing/business/warehouses are in other states.
This is a common misconception. Delaware was attractive not because of tax breaks (there is a DE corporate tax), but laws that shield large corporations against lawsuits from shareholders. That is the reason big corporations incorporated there. And they kept offices elsewhere to avoid the taxes :)
This has been changing though as other states (such as Nevada) have adopted similar laws.