Microsoft Freeloading In Washington State Courts 395
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."
Re:What a Troll! (Score:2, Interesting)
Will not matter. (Score:5, Interesting)
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.
Better than canada. (Score:1, Interesting)
Buy your MS licenses in China (Score:5, Interesting)
So then Microsoft would have no problem with me buying my MS licenses in China and using them in the US, right?
Yeah, riiiiiight.
Re:$1billion (Score:2, Interesting)
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.
Re:Will not matter. (Score:2, Interesting)
I think that if you dig deeper there are a lot of free rides being given to Microsoft. The money, except for taxes, is being brought in to -Microsoft-. Washington is probably no taxing them, and may even be subsidizing their property costs. Microsoft employees may live in Washington, or they may also claim residence elsewhere. So, if all the facts are brought ot light, I wonder just how much Washington is really making off of Microsoft. I don't wonder in an active fashion, like actually finding out. Too much to dig up, and sift through. I wonder, aloud, like the old guy on the porch, who has a pretty good guess in mind just how it is working out.
Too big to fail, and to big to pay taxes seems to be pretty popular, even as H1Bs and offshoring dry up any local benefits.
Just my opin. YMMV.
Re:What a Troll! (Score:2, Interesting)
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)
Corporations don't pay taxes, not news (Score:3, Interesting)
UK (Score:5, Interesting)
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.
Re:What a Troll! (Score:5, Interesting)
Re:What a Troll! (Score:2, Interesting)
Comment removed (Score:4, Interesting)
Re:What a Troll! (Score:3, Interesting)
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.
Re:$1billion (Score:3, Interesting)
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.
Re:What a Troll! (Score:2, Interesting)
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?)
Re:You've gotta love this entitlement mentality (Score:3, Interesting)
Where the hell do you think the money comes from to pay the corporate taxes? The tooth fairy? Of course it comes from the consumer, and of course prices will rise to accomodate them.
Where the hell do you think the money comes from to pay income taxes? Santa Claus? Of course it comes from the employer, and of courses salaries will rise to accommodate them.
Re:Will not matter. (Score:3, Interesting)
Re:What a Troll! (Score:1, Interesting)
Yes we do....
And what really ticked us off was Bill Gates (whilst still working there day to day) and Steve Balmer complaining at lectures in Seattle about the state of education in Washington and about not being able get good hires here in Seattle.
Given how much they DON'T pay here in taxes and how that is 100's of times the budget shortfall is in all the greater Seattle area school districts, that did not sit well....You don't contribute the same as other companies locally and in fact go out of you way to do so, you forfeit the right to complain about the quality of services those taxes pay for.
They have a LOT more Nevada corps than any other WA company - and that's on top of all the other benefits they get by threatening to leave
Re:What a Troll! (Score:3, Interesting)
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.
Re:What a Troll! (Score:3, Interesting)
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.