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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."
Now now .. don't let common sense get in the way of a first post rant
I am Slashdot. Are you Slashdot as well?
It's not that anyone cares that MSFT booked the revenue in Nevada.
BUT, That means the Laws of Nevada are dominant, not Washington. Microsoft needed to make one choice, but they seem to want the best of both worlds.
Technology -- No Place For Wimps! Grateful Dead and Jerry Garcia Chatroom -- http://www.wemissjerry.org
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.
I don't have an axe to grind with Microsoft, and I like and use many of their products every day.
That said, I hope they do get nailed to the wall. The Slashdot community often rails against patent trolls venue shopping for their stupid lawsuits, because it's the best chance for a settlement in their favor.
Microsoft is doing nothing different; venue shopping to lessen their tax liability. It's dishonest, immoral, and it should be stopped. If Nevada is such a nice place to operate, then maybe they should have more of their operations there. As it stand, any corporation in the US could open a branch office there, then report whatever in that state, and whatever funds their actual home state would have received vanish.
This looks like a pretty transparent shell game, and I hope the regulators take steps to make sure it won't happen again.
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
Did you see the Borg icon next to the story? Anything less than scathing villinization of the MacroHard Collective is blasphemy!
Further there is no down side to moving HQ offshore, to avoid taxes. Becoming a Panama flag flying ship or any such thing. When Somali pirates pirate ships, it is the US Navy that does the rescue even if the ship is registered in Panama. When there is no down side all the corporations will just go where the taxes are low.
Now that we have brain washed most Americans to vicereally hate taxes, whether it makes sense or not, the corporations have no down side at all. And we wonder why there are 40 million Americans without healthcare, why our infrastructure is crumbling and why there is no real wage growth in USA.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Do you go out of your way to find the way in which you can legally give the government the most possible tax revenue?
It is absurd to suggest that any public company not do the maximum they can to minimize their tax liability. You obviously have an ax to grind with MS, and that's fine, but digging up this kind of garbage is ridiculous. The same statements that you have made about MS can probably be made about 95% of the Fortune 500.
I think the point here was that the system is broken. Not that MS takes advantage of it.
I am the lawn!
So then Microsoft would have no problem with me buying my MS licenses in China and using them in the US, right?
Yeah, riiiiiight.
"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?
Good point. Which brings up the legal sensibility of a related issue: States being able to give giant tax breaks to companies as an incentive to exist there. I can see some underhanded deals making state congressmen richer, while giving out "good buddy" tax breaks to certain companies as incentive to keep lining their pockets. Perhaps i'm oversimplifying it, but I am not comfortable with how these arrangements could be abused. This is a bit off topic from leveraging differences in state regulations, but seems part of the same overall game.
If Microsoft were paying this 775M+ in taxes they are avoiding with a loophole that is 775M less in taxes that need to be assessed elsewhere.
You will never be able to find a tax reduction you can attribute to the government collecting this. That's not how it works, it just means the government is taking more. That doesn't mean I think the government should tolerate tax evasion. It will make MS a little less profitable/competitive, because they either have to absorb the higher tax from their profits or raise their prices/sales.
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Really? I'll best most people in Washington (state) do.
.
I have a mutual fund that includes MS stock and I expect them to use all legal means possible to reduce their expenses. One way is to minimize taxes.
I would also point out that MS does not really pay taxes. This is just another expense that gets passed to the consumer.
It's not that anyone cares that MSFT booked the revenue in Nevada.
BUT, That means the Laws of Nevada are dominant, not Washington. Microsoft needed to make one choice, but they seem to want the best of both worlds.
I know. Unfortunately, a law passed in 2004 bars companies from going offshore to get around the most Byzantine tax system in the World that we have here in the US. Does it cross anyone's mind to change our tax system? Nope. We just keep piling shit on shit, causing this jockeying.
Hate MS all you want, but what they're doing is nothing.
It's NOT me! It's the meds! I'm on 1000mg of Fukitol.
Do note that the companies opening the offices in Nevada need to make sure they have good accountants. I'm fairly certain Microsoft is following the letter of the law (or, at least, coming very very close), not just making shit up and paying taxes on the fabrications.
(I'm not saying I think it is a great thing they are doing, just that you are painting a simplified picture, there has to be some reason that they are able to recognize the revenues in Nevada, and I bet the reason is present in Washington state law, and it isn't particularly likely that companies engaged in more material businesses would be able to easily follow along)
Nerd rage is the funniest rage.
You will never be able to find a tax reduction you can attribute to the government collecting this. That's not how it works, it just means the government is taking more. That doesn't mean I think the government should tolerate tax evasion. It will make MS a little less profitable/competitive, because they either have to absorb the higher tax from their profits or raise their prices/sales.
The negative to this unfortunately unprovable. 775M might mean that the parking costs for using the state parks did not go up by $2/car, or that a school grant program was not reduced in funding, or that school funding was increased instead of holding steady. Just because taxes were not reduced does not mean it won't have an effect.
Do you Gentoo!?
I think it was during their anti-monopoly case that it came out they hadn't paid taxes in something like 3 of 4 years.
I swear to God...I swear to God! That is NOT how you treat your human!
Why does the name of Michael J. Fox appears at the top of the contract?
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.
Well, you make profits here in America? Pay taxes in America. Take the factories anywhere you want. But pay tariff when you bring your goodies here.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
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
Last time i checked, the government takes a nice big chunk out of my bread and butter. which is what microsoft is essentially avoiding, and then turning around and having the laws of a state they barely pay taxes to protect the assets they never sold in that state to begin with.
The tax system should be pretty simple. Whenever you earn money you pay a percentage to the government. The reason it is so complex almost everywhere is precisely because companies like Microsoft lobby to get little exceptions. Look at the percentage mentioned in this article. 1Billion in 143Billion? You try to find a civilised place (where anybody sane wants to live; I'm looking at you Bridge to Nowhere Land) where you can pay 0.6% tax.
Why do you think Nevada has such strange taxes? Because they want to attract companies like Microsoft who only do anything at all there because of this. Large amounts of the "intellectual property" "economy" are basically a tax dodge to shift earnings from places where people do work to offshore companies which own trademarks. Again; who's lobbying for "intellectual property" protection and why?
=~ s,(.*),<sarcasm>$1</sarcasm>,g if any_point_you_wish();
Maybe, but probably not. I would expect any government (Washington State or otherwise) that started receiving $775M+ in additional tax revenue would *spend* it, not cut taxes for others. Anyway, isn't there a difference between tax avoidance and tax evasion? I would imagine, given the size of the target, if M$ was evading taxes they would be brought to bear as quickly as the courts would allow.
Microsoft doesn't owe Washington jack crap, because what's it's doing with this Nevada thing is entirely legal. If Washington wants a piece of the pie then they need to change their state law to prohibit this practice by entities incorporated in Washington.
Yeah great example. You'd rather pay taxes on that first $95k in that famously low tax haven known as Europe...
Application of common legal doctrines such as nexus, the step doctrine, and alter ego theory
Those don't sound like legal doctrines. They sound like sci-fi movie titles.
Give me Classic Slashdot or give me death!
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.
The Bush tax cuts increased tax revenue through increasing the volume of assets flowing through the economy as well, and they must have had some positive effect on domestic jobs to keep unemployment around 4-5% all those years.
Manufacturing isn't the only game in town, though it might be more profitable if unions didn't stand in the way of more automation. Thankfully a relatively free market has kept us from trying too desperately to remain in a market space where we are simply no longer competitive. Ironically, the first wave of Asian industrial manufacturing growth is now transitioning to the next wave of cheaper manufacturing in places like India. Of course they're whinging about it in an almost American fashion. Economies simply have to adapt. If you try to hold on to old modes artificially through things like protectionism, the tariffs simply make the cost of living for the whole population higher.
However I do agree that the US armed forces need to stop policing the world. If anything, foreign governments should be defraying the costs if we're to protect their shipping as well as ours. I would support closing most overseas bases and using carrier groups as the primary means of worldwide force projection. And we also need to stop dumping billions of dollars in 'aid' to nations all over the globe. My tax dollars shouldn't be flowing directly into corrupt dictators pockets.
The taxed always hate taxes if they're sane. You do realize that the American War of Independence was in many ways a tax revolt right? This country was born hating taxes. Thankfully it does too, or we'd probably be tossing even more of our product down the government toilet.
I support the Slashcott and will not be reading or commenting from 2/10/14 to 2/17/14. Beta is steaming pile of dog shit
There are a couple of phrases that are pet peeves of mine because people throw them around without really understanding them.
"Correlation does not imply causation" is, strictly speaking, true, but is often used to refute an argument rather than point out a possible questionable premise of an argument (if you don't understand the difference, don't use this phrase). Correlation by itself does not imply causation, but if the correlation is not a statistical anomaly, it implies either (a) causation or (b) common cause. Therefore it does not refute the argument so much as it says that "maybe the conclusion is wrong, but I can't say for sure without further information".
My other pet peeve phrase is "Absence of evidence is not evidence of absence" which is misleading at best. A more correct statement would be "Absence of evidence before reasonable investigation is not evidence of absence". Once a reasonable search for evidence has been made, especially if said evidence should be reasonably detectable by currently available methods, then an absence of evidence IS evidence of absence.
I've given up being peeved by "begs the question". People are going to use that phrase wrong and no amount of education will help this.
*sigh* back to work...
Do you go out of your way to find the way in which you can legally give the government the most possible tax revenue?
No... I don't make much money, and I've got a couple dependents... So I'm not really trying very hard to pay more than they ask me to... But I also don't put much time and effort into paying less than they ask me to either. I know most people try to find as many loopholes and deductions as they can, which is maybe what you're aiming for... But I don't think most people report their income in an entirely different state to avoid paying taxes.
It is absurd to suggest that any public company not do the maximum they can to minimize their tax liability.
Ehhh... I guess it is true that a public company's first responsibility is to maximize the investment of its stockholders... Which minimizing tax liability will help accomplish... But you really think it is absurd to be surprised that a company would go this far?
The court system is funded by tax dollars. Microsoft uses the court system in Washington. But they don't like the prices that Washington courts charge (their taxes) so they decide to pay the courts in Nevada instead. Fine, maybe you can find enough loopholes and technicalities to make that legal... But how does that make sense?
You know, I like Apple's OS upgrade pricing much better than Microsoft's... When I upgrade to Windows 7 I'm going to pay Apple instead.
You obviously have an ax to grind with MS, and that's fine, but digging up this kind of garbage is ridiculous.
I don't personally have an axe to grind with Microsoft. I use their products every day and am reasonably happy with them. They get the job done, at least. And their products keep me employed. So, no, no axe to grind.
The same statements that you have made about MS can probably be made about 95% of the Fortune 500.
And if your friends jumped off a bridge, would you jump too?
Since when is everybody else does it an acceptable argument?
The problem is that the system is being abused - not that Microsoft is committing the abuse. Of course if Fisher Price were dodging taxes we probably wouldn't see the story here on Slashdot, but that wouldn't make it a non-story or an ok thing to do.
"Work is the curse of the drinking classes." -Oscar Wilde
-= According to Wikipedia =-
Astroturfing is an English-language euphemism referring to political, advertising, or public relations campaigns that are formally planned by an organization, but designed to mask its origins to create the impression of being spontaneous, popular "grassroots" behavior. The term refers to AstroTurf, a brand of synthetic carpeting designed to look like natural grass.
Thus, submitting a story to your own blog is probably Astroturfing.
It is absurd to suggest that any public company should be permitted to evade the law.
So? One criminal at a time.
Tom Swiss | the infamous tms | my blog
You cannot wash away blood with blood
Good for them. This is what they pay their lawyers and bean counters for. If they weren't working the system like this I would be disappointed.
All businesses and individuals should reduce their tax burden any way they can. If uncle sugar didn't want it to happen he would change the rules.
It is absurd to suggest that any public company not do the maximum they can to minimize their tax liability.
It is absurd to suggest that I, the alternative taxpayer, should not castigate them leaving the tax burden to me. If we're all just rationally self-interested parties, then I should be doing everything I can to get Microsoft to pay as much of the tax burden as possible, for exactly the same reasons that you assert that they should attempt to shift the burden onto me.
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I'll make it easy, the reason it's done is the entire tax burden for a corp registering it's revenues solely in Nevada is total tax on them regardless of how many or how little revenue there is is exactly $200. The reason in Washington Law your looking for is that the tax burden will be greater than $200.
It's simply a play to avoid taxes in Washington State while still taking advantage of the services Washington State offers.
Well that and Nevada doesn't have an information sharing agreement with the IRS so they're completely out of the loop on how much tax you actual owe based on your revenues. It helps on avoiding Federal taxes as well.
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
As a Washingtonian I am here to say what they are doing is not wrong. Responsibility lies on law makers to make this practice illegal.
Exactly.
Nobody thinks picking a good meal over a bad one is unethical.
But most people agree that picking the best parts off a buffet is at least questionable. Yes, it is economically rational, but it violates basic senses of fairness and cooperation that humans (as social animals) have. Corporations do not have such instincts, and that's why they constantly violate what us humans "feel" is right.
This is just one example. Picking up the best parts, maximizing your own profit. Most of us humans somehow "feel" that you have an obligation with a choice. Yet rational argument will lead us to "it's legal, they're a profit-oriented entity, so they should do it". And yet we can't shake the feeling that it's not ok.
Because it isn't. We've just not managed to write good laws that really express what we think society should be about. That's mostly because we let lawyers write laws, but that's a different discussion for a different time.
Assorted stuff I do sometimes: Lemuria.org
It's possible that the Washington State government is perfectly fine with the situation. After all, I'm sure Microsoft brings in a lot of money to the state despite finding a loophole in this particular area.
What M$ is doing in not right but is not illegal apparently. so for any thing to happen the law needs to be changed. and I believe this guy has been trying to do this for years for this story has been posted several times on slashdot, with hundreds of comments on each post with same gist. http://news.slashdot.org/story/09/09/22/225233/Microsoft-Tax-Dodge-At-Issue-In-Washington-State (Sept 22, 09) http://slashdot.org/article.pl?sid=08/02/04/1520219 (Feb 04, 08) and http://slashdot.org/article.pl?sid=04/10/01/2137228 (Oct 01, 04)
Trying to minimize their tax liability in a grotesquely complex and arbitrary system. Quit being righteously indignant. You do it too. Taxes are not voluntary. Everybody pays what they have to and no more.
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
I'm not a corporation, so I have to claim the income as being earned right here in the US.
And there's the problem. You hear the claim that a corporation is legally a "person" and therefore needs all the rights and privileges we guarantee to people, but really they're not treated like people. They're not bound by the same rules as people. They don't have the responsibilities people have. They have more rights and more freedoms than people have. And if a corporation gets itself into enough trouble, the people running it can essentially close up shop and walk away without consequences.
Really? Bonuses for individual employees that do great work are more important to you than the greater social good that is potentially created by a fair and balanced taxation system? Universal medicare for example?
I'm not opposed to the concept of bonuses, but to argue that they're "more important" than taxes is to ignore any history of benefits that you may have gained or may in the future gain from the common social contract.
There's a reason we organize into political structures, the common good is one of the key ones. When the individual becomes MORE important than the collective you're standing on the precipice of a slippery slope.
There is of course a flip side, but don't give me some bullshit Soviet Union/Cuba/China communism argument. In all of these cases an elite group of individuals *espoused* the importance of the collective good, while simultaneously protecting their own selfish interests.
So...maybe you think your taxes are already fair, but it *seems* like Microsoft is trying to have their cake and eat it too, and Washington state is being left on the hook.
Skot Nelson music is my saviour / i was maimed by rock and roll
Exactly.
But most people agree that picking the best parts off a buffet is at least questionable.
I think "most people" would agree that the whole idea of a buffet is picking the bits you like best.
If a corporation uses local infrastructure but dodges local taxes, it's me who ends up paying to support them (more welfare for the rich, YEAH!)
I would rather have the option to save by buying less consumer goods than have cheap consumer goods where they get to pick my pocket to make up the difference.
Also keep in mind the 'bait and switch' nature of this all.
The State of Washington has had motive to allow Microsoft to do this for years and year, because it isn't like Microsoft generates zero tax revenue in Washington. Far from it, their payroll taxes must be a significant figure on the States revenue books.
The last thing they want is for Microsoft to move out. They have been satisfied with their share of this pie for many years, not wanting to disrupt the status quo and risk a real restructuring of Microsoft elsewhere.
But now they want to seize 1 billion dollars as a retroactive penalty, precisely when the state is in the most dire financial trouble its been in for decades? Please.
They didnt see a problem with it last year, so fuck them. Its OK for them to change the law and nail Microsoft on future money, but its not OK for them to have been complicit all these years essentially changing the rules of the game retroactively.
"His name was James Damore."
If you think this is news, you may want to look into what's special about Zug (Switzerland).
Why do people argue this only about god? These same people are prefectly fine saying "the tooth fairy doesn't exist."
Of course my argument is that since there is no evidence of a god, it doesn't make any sense to act like there is. God may or may not exist, but since we have no evidence, we should act like there isn't a god, because to do otherwise is pointless. (If we don't even have evidence a god exists, how can we possibly know what a god would want from us if one did exist?)
I understand the problem with taxing revenues or, for that matter, gross profits. Technically, Washington State's tax is on Gross Income, which can be slightly different from the usual legal definition of revenues, but probably isn't in Microsoft's case. Most of MS's income would fall under either Manufacture or Wholesaling, with a tax rate of .00484 in either case.
Microsoft certainly also could get the High Technology credit against this base, and while I won't bother to look up enough of their public records to be sure, I would say, offhand, they could probably qualify for some of the community empowerment credits and related in a way that would be quite advantageous. I'm not one of Microsoft's accountants, and I wouldn't venture to guess whether their research costs would make a significant dent in that total rate or not - The total rate is still trivial, But I agree, the principle of taxing gross instead of an honestly figured net is neither moral, nor pragmatically the most functional method.
But the whole argument against double taxation of corporations is itself a fallacy. A "C" corporation exists under law as a separate person in itself. It gets taxed once. In exchange, it gets benefits such as legal person-hood, and perhaps more significantly, shareholder's limited liability. Any stockholders get taxed on their income, not the corporation's. Those stockholders could vote to convert the "C" corp to one or more Partnerships, "S" corporations or other pass-throughs. While there are some limits on this, it's generally doable even for a company the size of Microsoft any time they sufficiently don't like the "burden of double taxation".
With its vast number of stockholders, Microsoft would have to restructure as multiple "S" corps and particularly as a structure of parellel holding companies and other fairly complex systems, and they would have to do some special shuffling of options to move foreign investors out of some sub-corps, but any divisions they split off this way could exist without taxation, and some of their divisions are small enough the conversion becomes rather simple, yet MS has no interest in avoiding this 'double taxation' even in those cases.
That's certainly understandable, both because a voluntary split up still feels just like being busted up under anti-trust to many investors, and because the independent sub-corps would become direct competitors in some cases, but if the taxes involved really hurt the way some corporations claim, they'd be willing to pay such prices.
The chief reason not to is the owners of "S"'s and other pass through entities can't take an active role in managing the company without also having full liability for what their company does.
Incidentally, Washington state fully recognises the usual federal tax entities such as Sole Proprietorships and Partnerships. It allows all major non-C structures - Limited Partnerships, Limited Liability Partnerships, Limited Liability Corporations. And it allows for the use of the Massachusetts Trust structure.
Who is John Cabal?
To a certain extent true - but you are forgetting that the whole reason MSFT registered (or whatever the word is) in Nevada is because (at least according to the article), there is no tax at all in that state. Also, is this not the third or fourth time this has been in the news lately?
It's not wrong. You're tying two arbitrary and unrelated concepts together and claiming they are related when they're not. You're also just making a statement that it's wrong with no real backing other than the statement.
Microsoft has a net positive impact on Washington and they do pay taxes in Washington. They are entitled to services. If Washington doesn't like it they can change the laws. Microsoft has a responsibility to its shareholders and its employees.
Further, you assume the Washington tax is "fair". What if it's not? Should Microsoft be beholden to pay an unfair tax? What is a fair tax and who gets to decide?
Finally, the "rules" allow what Microsoft is doing. If they don't then they will be smacked down in court. So you've falsely concluded there are two sets of rules when there is only one set of rules - Washington state laws. And they appear to allow this.
Nevermind the fact that credit default swaps were made possible by the Clinton administration's passage of the Commodity Futures Modernization Act. Of course everything is Bush's fault.
I don't like most George W. Bush's policies much either, but he is not the grand scapegoat that so many people have made him out to be.
I support the Slashcott and will not be reading or commenting from 2/10/14 to 2/17/14. Beta is steaming pile of dog shit
People are going to use that phrase wrong and no amount of education will help this.
People are going to use that word incorrectly and no amount of education will help this.
Exactly.
Nobody thinks picking a good meal over a bad one is unethical. But most people agree that picking the best parts off a buffet is at least questionable.
You're related to that bad analogy guy, aren't you?
I'm thinking of starting my own business, and I would love to pay less in taxes
But you still want good roads and schools, right? If you want to have your tax locus in nevada, then move there. There are plenty of startups in seattle, so we don't need vultures like you skipping out on their obligations.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
The State of Washington can do many many things to sue just about anyone it wants.
Check this out:
The State of Washington can bring up a case under any of the above.
Just want to clarify things for a few of the commenters: Although offensive, it's completely legal for Microsoft to sue in Washington courts on its Nevada-based contracts. However, it's record of doing so further erodes its tax argument that it isn't in the software licensing business in Washington. The article, if you take the time to read it, explains why Microsoft's tax practices may constitute illegal tax evasion. It's really up to the Department of Revenue to explain why it's as yet chosen not to contest Microsoft's returns - and they are preparing to respond again soon.
Really? Bonuses for individual employees that do great work are more important to you than the greater social good that is potentially created by a fair and balanced taxation system?
Why, yes. While I recognize the need for a certain level of taxes (maintaining infrastructure, financial costs of the government's operation), I would much rather reward and retain individuals that are skilled and industrious workers than distribute that money as a free handout to everyone in the US.
Right now, a lot of my money is being taken and given to some fabulously wealthy defence contractors for their thousand dollar toilet seats. I'd prefer that it go to something worthwhile that will improve the quality of life in this country, which would include a universal healthcare. There is a sweet spot between the government spending no money and the government spending some money. We spend too much on defence, not enough on health. Disclaimer - I think that welfare is implemented in a way that does more harm than good to the recipients.
Remember, the money you made, you did not make and secure it on your own. You made it with the help of roads, public education (for you or your customers who can read your ads), the internet (how was that made?). It's protected with emergency services, the armed forces (yes, its necessary to a degree), and the FDIC.
As an Australian I am here to call your spade a bloody small shovel. Wrong is wrong, no matter how many weasels you have to chorus that what you're doing is legal - and if we RTFA, even that's unlikely (yeah, IMO, IANAL, etc). And law makers have the responsibility to make a practice illegal only if somebody flouts their own responsibility to be a good citizen - there's no need to make laws about something if nobody is doing it!
Crap like this - and there's a lot of it going on - undermines the social contract. I know it, you better know it, and I damn well hope your government figures it out. Because falling doesn't hurt near as much as the sharp sudden stop at the end, and I don't want to find out the hard way if America's blast radius is big enough to take my country with it.