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Microsoft Freeloading In Washington State Courts
reifman writes "For tax purposes, Microsoft reports that it's earned its estimated $143 billion in software licensing revenue in Nevada, where there is no licensing tax, as we discussed a few weeks ago. However, for legal purposes, Microsoft relies on Washington law and its underfunded courts to defend its contracts as it did in Microsoft Licensing GP vs. TSR Silicon. Application of common legal doctrines such as nexus, the step doctrine, and alter ego theory may lead to findings that Microsoft owes the state more than $1 billion in taxes, interest, and penalties."
I live here in Seattle, and this has been discussed in the newspapers before. Actually Microsoft does sell software here in Washington, just not very much. However, I think the state is just as happy to have all the high paying jobs. Technically Boeing is the largest single employer here in Seattle and they have sold planes out of Delaware for many years. It's nothing new.
Washington state has sales tax in place of income tax in other states. Currently it is 6.5% state wide, with an added 2.5% here in King county. So MS, Boeing, Motorola, Adobe, etc. all have sales outlets outside the state.
once more into the breach
"Do you go out of your way to find the way in which you can legally give the government the most possible tax revenue?"
Fair enough - but if that's the case, then let Microsoft lodge its licensing lawsuits and etc. in Nevada as well... where the laws are not as strongly in its favor.
Incidentally, my employer's corp headquarters is in the EU. Can I therefore claim the first $95k of my income as tax-exempt because it was earned "overseas", taking advantage of a wee tax loophole in spite of living in the US? Of course not - I'm not a corporation, so I have to claim the income as being earned right here in the US.
Quo usque tandem abutere, Nimbus, patientia nostra?
How much revenue does Washington State get from Microsoft? Not just in direct taxes but on all the taxes that the employees pay?
Washington has no state personal income tax, so it may not be as big as you surmise.
Quo usque tandem abutere, Nimbus, patientia nostra?
Microsoft is the one who feels entitled. They are HQd in Washington State. They feel entitled to declaring another state as their "real HQ" and that "everything we sell is sold from this tiny one room office in Nevada!" This is akin to getting a PO box in Washington State to avoid paying income tax in your home state. "No, this is my secondary residence, my primary is a PO box in Seattle, so I'm an out of state worker!" On top of that, they feel entitled to say "Even though we have legally declared that we are NOT a Washington based company, we deserve free access to the Washington courts, to settle a dispute over a legal contract bewteen a Nevada based company and a New York based company." Not the correct venue. The judge should throw their asses out and hand them a fine for wasting his time. Why on EARTH should a WASHINGTON judge settle a dispute between two out of state corporations? It doesn't involve Washington State at all, except that the Nevada based corporation has a branch office in Washington.
ASCII stupid question, get a stupid ANSI
Do you go out of your way to find the way in which you can legally give the government the most possible tax revenue?
""Anyone may arrange his affairs so that his taxes shall be as low as
possible; he is not bound to choose that pattern which best pays the
treasury. There is not even a patriotic duty to increase one's taxes.
Over and over again the Courts have said that there is nothing sinister
in so arranging affairs as to keep taxes as low as possible. Everyone
does it, rich and poor alike and all do right, for nobody owes any
public duty to pay more than the law demands."" - US Federal Court judge Learned Hand
Life is hard, and the world is cruel