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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."
How much revenue does Washington State get from Microsoft? Not just in direct taxes but on all the taxes that the employees pay? Odds are that one billion is a drop in the bucket and Washington state will not risk ticking off Microsoft.
Microsoft is a money pump for Washington State. How many billions of dollars a year does it bring into the state from other states and even countries?
Not that I say it is right but Washington State will not go after Microsoft for this because it just isn't worth the effort or the risk.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
So then Microsoft would have no problem with me buying my MS licenses in China and using them in the US, right?
Yeah, riiiiiight.
Was reading an article from the BBC on corporations in the UK claiming other countries as their headquarters to save tax dollars.
Evidently if you do this in the UK, they check see that the heads of the company are ACTUALLY operating in that country.
Why don't we do that here in the US? It seems like a fair standard to me.
The problem isn't MS choosing to report their income from software licensing in Nevada (where they pay no tax on it) instead of Washington (where it would be taxed). The problem is suing a New York state company over licensing issues in Washington state while reporting the income from licensing in Nevada. If Microsoft runs their software licensing business out of Nevada (as their tax reporting claims), then the appropriate venue for suing a New York state based company over licensing issues is either New York or Nevada. Is it legal? Apparently. Is it ethical? No.
The truth is that all men having power ought to be mistrusted. James Madison
In the last 20-25 years, the US has become far less business-friendly than it once was. A lot more regulations, an increasingly litigious society coupled with a legal code that is often vague, more expectations on benefits, etc.
It also doesn't help things that the expectations of the American people haven't changed. My boss' cousin works for Honda as an assembly line worker. He makes a fair wage; the UAW guys practically down the street from their plant expect a few times that pay and benefits for the same job which puts their combined income at a level higher than most of the senior software engineers I work with! They act like it's still 1950 and the American car manufacturers face no serious competition from cheaper, more reasonable Japanese and Korean labor and products.