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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."
Way to blame the state's shitty accounting and fiscal responsibility on Microsoft. They pay for their facilities taxes, employee taxes etc. The licensing issue is a NON-issue. I don't see why it's a big deal for a company to use certain states for the divisions they choose.
There seem to be an awfully high number of people who commute from New Hampshire to work in Massachusetts because of the lack of personal income and sales taxes in NH. There are also a number going the other way to shop because of the lack of sales tax.
Washington keeps an eye on its borders because neither Oregon nor Montana have sales taxes. I've seen roving police patrols stopping motorists coming in who have what looks to be a vehicle full of new consumer goodies. Idaho, at that point, is more of a speed bump than a State. The panhandle is only about 85 miles across on I-90.
How many California companies actually incorporate in Nevada? How many companies from almost every other State incorporate in Nevada for just this purpose?
Lots of people cross the borders from Florida and Tennessee into Georgia to buy gasoline or cigarettes because of the drastic difference in taxes.
Taxes are a big factor when you start making decent money. It is the reason the various States have differing levels of property, sales, corporate and income taxes.
Learning HOW to think is more important than learning WHAT to think.
Note that Obama's own budget guys are expecting to run deficits in his first four years (excluding the Stimulus package and bailouts, mind you) that will be larger than the total deficits of Bush's eight years.
Yeah, actually including two wars in your budget will do that.
They thought the same about Boeing. It's now in Chicago.
You want to keep the seat of leadership where you have some hope of seeing a benefit. (Consider Bentonville, AR.) They can move anywhere, anytime they want to. And they have the fiduciary responsibility to do so, or will be sued into oblivion by their own shareholders.
Microsoft has to pay other taxes, just not this one, to Washington. There are a slew of taxes that corporations have to pay.
The act of licensing a product doesn't actually use state resources.
If Microsoft licenses 2,000,000 $250 copies of Vista, it doesn't utilize any more state resources than if they had licensed 200,000 copies of vista, or if they had licensed 2,000,000 $100 copies instead.
You might think it implies they hire more support people in Washington, and thus further use state infrastructure... but it doesn't, thanks to outsourcing and call centers in India.
And most copies of Windows licensed are OEM, and volume licensed, which doesn't generate additional support demands.
Well, I've not seen anywhere on the article, nor on this forum, a listing of what laws were broken.
I mean, corporations do this all the time...many companies incorporate in Delaware for the tax breaks they get, even while most of their manufacturing/business/warehouses are in other states. While you might rightully bitch about the 'moral' aspect of this...if they really broke no laws on the books, then they did nothing wrong legally.
Would Washington be a better place if MS just pulled up roots, and moved to another state? Another country?
I'm just curious...why are tax revenues so bad in the state where a company like MS is employing what I could guess is a good number of people and what I would guess were pretty good salaries/bill rates? What is the state income tax like there? What is the sales tax there? What is the property tax there?
Most states get most of their money from many or (in the case of my state ALL) of these.
I'm just saying...if MS (and I can't believe I"m defending MS here) actually broke no tax laws, then you really can't accuse them of tax evasion. It is not against the law to work within the law. If you don't like the tax laws as they are, change them. Just don't be pissed if they then leave the state. Other states would be thrilled to have the high paying jobs within their borders.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
The system is devised that if you have a lot of money, and know what you're doing, you don't pay a lot of taxes.
That's because the people that write tax laws are usually pretty wealthy. They write loopholes in for themselves to take advantage of. I'm personally of the opinion that dramatically simplifying the tax code to prevent this is more important than "fixing" health care.
Bureaucracy expands to meet the needs of the expanding bureaucracy.-Oscar Wilde
Can we get an administration in office that understands some economics?
So you mean encouraging imports over exports, removing corporate personhood, supporting cooperatives and small scale businesses and breaking up large monopolies? Or do you really believe the last 8 years haven't been completely dysfunctional, too?