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Microsoft Tax Dodge At Issue In Washington State

kdawson posted more than 4 years ago | from the office-at-area-fifty-one dept.

Microsoft 681

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."

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681 comments

You know what's worse than the MS tax? (-1, Offtopic)

Anonymous Coward | more than 4 years ago | (#29510717)

Cory Doctorow's Drew Carey-impression of a haircut.

Dodgy statesmen (5, Funny)

Anonymous Coward | more than 4 years ago | (#29510719)

Way to blame microsoft for the state deficit.

Re:Dodgy statesmen (4, Insightful)

anagama (611277) | more than 4 years ago | (#29510771)

Way to blame MS for using state resources without contributing to that cost.

Re:Dodgy statesmen (5, Insightful)

zoloto (586738) | more than 4 years ago | (#29510935)

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.

Re:Dodgy statesmen (4, Interesting)

plague911 (1292006) | more than 4 years ago | (#29511117)

Except they arnt. The state they are using to generate the revenue is Washington the state they are CLAIMING they use to generate the revenue is Nevada. This is pretty much a clear cut case of tax evasion. Its like I work in New York but i claim income tax in NJ because the taxes are lower. Pretty blatantly illegal. They should get their back taxes and slap them with a 100% over due fee to net them an extra billion.

Re:Dodgy statesmen (1, Insightful)

Anonymous Coward | more than 4 years ago | (#29510945)

Way to blame MS for using state resources without contributing to that cost.

So, you really think they've used $707 million of state resources that their employees aren't already paying for in income tax?

Re:Dodgy statesmen (5, Informative)

iccaros (811041) | more than 4 years ago | (#29510971)

Washington has no income tax.. That is the point..

Re:Dodgy statesmen (0, Troll)

daath93 (1356187) | more than 4 years ago | (#29511001)

Theres a sales tax that the people who are paid wages by MS use to go out and buy things with, from food, toys, electronics, cars etc. Follow the fricken bouncing ball. If you dont get why Washington went with sales tax over income tax, then you need an economics lesson.

Only a couple of problems with that. (3, Insightful)

khasim (1285) | more than 4 years ago | (#29511059)

#1. Sales taxes are the most regressive form of taxation.

#2. The state does not get a cut of the money that you spend out of state. Which is an issue when you're talking a large number of millionaires or better.

Re:Dodgy statesmen (0)

Anonymous Coward | more than 4 years ago | (#29511027)

Way to blame MS for using state resources without contributing to that cost.

So, you really think they've used $707 million of state resources that their employees aren't already paying for in income tax?

The point is the resources the company are using. Remember they are the ones trying to get the state to pay half the cost of a bridge from their parking lot to the main campus. Microsoft demands a lot of resources and avoids contributing whenever possible. Setting up a post office box in a state to avoid paying taxes in the state where you do business is tax dodging.

Re:Dodgy statesmen (1)

fatalwall (873645) | more than 4 years ago | (#29510947)

you forget the revenue they make from all of those people employed in there state. If they go though with what there pulling whats to stop microsoft form moving there developers to a new state? Technically how they have things set up the employees handling the licenses are not in Washington so they are not using Washington resources. Last i checked this is not the time to chase your largest employer out of the state.

go for it! (0)

Anonymous Coward | more than 4 years ago | (#29510723)

I'm sure there are plenty of other states that would be happy if Microsoft relocated.

Disappointing though it may be... (4, Insightful)

PCM2 (4486) | more than 4 years ago | (#29510729)

...I can't see how anyone could expect Microsoft to act differently.

There appears to be a legal loophole that has allowed Microsoft to hang onto $707 million over the years. Until a judge rules otherwise, they're going to exploit that loophole. When the loophole is closed, Microsoft is going to look for a new one. Can you say you'd act any differently?

What's that? You do act differently? You pay your taxes, you say? Well then... it sounds as though Washington would have better luck recouping its money if it simply raised the state income tax. Presumably all of the employees at Microsoft's Redmond campus file taxes in the state, yes?

Re:Disappointing though it may be... (0)

Anonymous Coward | more than 4 years ago | (#29510751)

Washington State Income Tax?? What does that mean?

Re:Disappointing though it may be... (1)

Nethead (1563) | more than 4 years ago | (#29510799)

As you well know, A proposal for a Washington State Income Tax means being run out of Olympia on a rail. Ain't gonna happen. No politician in WA has ever survived proposing a State income tax.

Re:Disappointing though it may be... (2, Insightful)

NoYob (1630681) | more than 4 years ago | (#29510777)

Take away the loopholes and they'll just move everything to another state.

Yes, that's exactly what I would do and I have no problem with any company that does that or moves overseas to avoid our Byzantine and asinine tax system.

Re:Disappointing though it may be... (4, Insightful)

Trepidity (597) | more than 4 years ago | (#29510807)

Have you left yet?

Re:Disappointing though it may be... (3, Informative)

NotQuiteReal (608241) | more than 4 years ago | (#29510969)

Have you left yet?

I don't know about Washington, but my state, California has plenty of hits when you google "companies leaving California"...

Anecdotal information only goes so far.. personally, I know of a local printing company that has left my state, taking 28 jobs with it.

There are plenty of other stories. My brother in San Diego told me about Buck Knives leaving town a few years back, taking or losing hundreds or more California jobs.

Competition among the states was what the US Constitution once stood for - let each experiment and see what kind of environment produces the greater good. Taxes are way up there in perceived "badness", among the productive.

Re:Disappointing though it may be... (4, Insightful)

Trepidity (597) | more than 4 years ago | (#29510997)

Taxes are way up there in perceived "badness", among the productive.

In my experience, they aren't, and empirical evidence seems to suggest they're at least not the deciding factor, given how large a percentage of the productive live in high-tax states likes New York, California, and Massachusetts.

Re:Disappointing though it may be... (5, Insightful)

chill (34294) | more than 4 years ago | (#29511075)

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.

Re:Disappointing though it may be... (1)

Trepidity (597) | more than 4 years ago | (#29511107)

I agree they're a factor; my main point was that they aren't one of the largest factors when people decide where to live. Some wealthy people live in exurbs of Boston in New Hampshire, sure. But overall, more wealthy people choose to live in high-tax places like New York City, Chicago, San Francisco, and Los Angeles.

Almost (0)

Anonymous Coward | more than 4 years ago | (#29511021)

See, I'm military, so I don't have the option, but I don't pay state sales tax, and my car is titled in the great state of Texas (yes, it's expensive, but it's my state of residence). My wife, seeing the taxes here, decided that it was financially a better option to not teach here after considering the tax implications. So no, we didn't leave, but we sure as hell are staying as far away as we can. Fuck California

Re:Disappointing though it may be... (3, Insightful)

Anonymous Coward | more than 4 years ago | (#29510821)

... and, in fact, Washington already drove Boeing (HQ) away with their high tax rates. Incentives matter. Companies aren't just a piggy bank to be raided at will.

Re:Disappointing though it may be... (0, Offtopic)

TheGratefulNet (143330) | more than 4 years ago | (#29510887)

Companies aren't just a piggy bank to be raided at will.

correct, that is reserved for the non-rich ordinary working joe. his bank is fair game to be raided by the gov.

(what, you think you and your kids and your kids' kids won't be paying the 'bush war' tax the next few decades?)

Re:Disappointing though it may be... (-1, Offtopic)

CrimsonAvenger (580665) | more than 4 years ago | (#29510981)

(what, you think you and your kids and your kids' kids won't be paying the 'bush war' tax the next few decades?)

And I'll be paying the "Obama" taxes far longer.

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.

Re:Disappointing though it may be... (2, Funny)

rocker_wannabe (673157) | more than 4 years ago | (#29511031)

I guess someone forgot to tell the CEO's about the corporations not being piggy banks to be raided.

Re:Disappointing though it may be... (0)

Anonymous Coward | more than 4 years ago | (#29510783)

> Presumably all of the employees at Microsoft's Redmond campus file taxes in the state, yes?

Nope. There is no state income tax in Washington, it is Federal only. Tax revenue is almost exclusively funded through sales and property tax - both of which have surely dropped as the economy slowed over the past few years.

Re:Disappointing though it may be... (1, Informative)

Anonymous Coward | more than 4 years ago | (#29510823)

But MSFT employees do figure heavily to sales and property tax revenues... Seattle wouldn't be nearly the town it is without them, to say nothing of Redmond or Bellevue.

Re:Disappointing though it may be... (1)

anagama (611277) | more than 4 years ago | (#29510905)

So what? I have employees. Should I be exempt from my own tax burden because my employees pay taxes? That is a "lame excuse" not a "good reason" for MS to be using state resources, enjoying the advantages of being in WA State (one of the prettiest and most alluring places in the world), and not contributing a bit upkeep.

Re:Disappointing though it may be... (5, Informative)

anagama (611277) | more than 4 years ago | (#29510805)

No state income tax. Instead, WA taxes the shit out of small business. It can be especially hard on retailers because the state B&O tax is based on gross revenue, not profit. In other words, it is totally possible to run a money losing business and owe taxes on top of that. As a small business owner in WA (profitable thankfully), this story has me totally pissed.

Re:Disappointing though it may be... (1)

Nethead (1563) | more than 4 years ago | (#29510841)

Well, we do get some of property tax from Bill and Paul's houses. And MS is one of the few firms that is still doing OK for employment. I'm sure that Olympia doesn't want to do a Boeing on them.

I'm sure that MS will make up the tax by sending Olympia truckloads of Vista disks.

 

Re:Disappointing though it may be... (0)

Anonymous Coward | more than 4 years ago | (#29510819)

WA state doesn't have an income tax, and raising the sales tax (or adding an income tax) would punish the low-level employees and non-MSFT employees in the state for the decision of a relatively small group of people.

And then who says MSFT would even raise the pay of the employees to cover the higher costs of living in the state?

Re:Disappointing though it may be... (-1, Flamebait)

Anonymous Coward | more than 4 years ago | (#29511005)

Well, for starters it's a little more than a loophole. I, as a person, don't get to declare that I'm a resident of a state without income tax because I have a storage locker there. That's essentially what MS has done here.

But you sound like another one of the Randroids, so it's likely pointless to argue. Hows about you just commence "going Galt" and GTFO?

MSFT will bully the state... (3, Insightful)

Anonymous Coward | more than 4 years ago | (#29510735)

... and threaten to move out. If MSFT leaves or even reduces force, greater Seattle's retail and real estate would be crippled, not to mention sales tax and property tax revenues. I'd like to see those taxes paid too, but unfortunately MSFT has the greater bargaining chip here.

Re:MSFT will bully the state... (3, Insightful)

erroneus (253617) | more than 4 years ago | (#29510859)

The government simple cannot and should not "roll over" for business. That has simply got to stop. If Microsoft had to move, it would be EXTREMELY painful and it would probably be an active news story for the next months following that. Government needs to finally and at last stick to its guns and push for it. Let'm go...if they actually would go. Other states will see this and, if they manage to grow a pair, will also tax them... though they'd probably end up in Texas where the law says all you have to do is put some animals on your site and you get taxed at the agricultural rate.

I really don't think they would move. I really don't.

Re:MSFT will bully the state... (4, Insightful)

Anonymous Coward | more than 4 years ago | (#29510913)

No. Other states will see this and say "gee, I'd love just 1% of Microsoft." And lower the tax rate just to attract them.

If you don't think they would move, then riddle me this. Why did they set up the Nevada shop in the first place? If not motivated by tax.

Re:MSFT will bully the state... (4, Insightful)

FooAtWFU (699187) | more than 4 years ago | (#29511081)

I'm dubious about the concept that Washington state deserves a slice of a cool billion dollars or so from the-rest-of-the-world just because they have developers in the state. If Ford were to put a factory in Redmond where they make cars, does Washington have some moral right to collect taxes on all the cars sold by Ford anywhere? (Or even just all the cars sold by Ford from that factory?) How about a factory and the corporate HQ building? How about corporate HQ, a factory, and a random dealership? What's so special about any of those workplaces that they should expose the company's entire product line to a certain tax regime? What makes that "fair"? The whims of the legislature of the state of Washington and whatever situational ethics they may or may not have today?

Re:MSFT will bully the state... (1)

Bob_Geldof (887321) | more than 4 years ago | (#29511119)

Don't worry about it. All the politicians out here in Washington state are a bunch of retards that couldn't legislate themselves out of a cardboard box. I swear, the only body of legislators that I am aware of that could be any worse are two doors south of here...

Re:MSFT will bully the state... (1)

mabhatter654 (561290) | more than 4 years ago | (#29510899)

At this point a good portion of the state would probably prefer to see them go...listen to the various posters just here and there's no money in the state to pay for all the traffic and public works needed... it's too late for them to pay up. Where WOULD Microsoft go? About the only other low-tax states are Nevada and Utah... both isolated and miserable desert except for the already populated (expensive) parts, moving an entire "Microsoft" (and all it's ancillary business) anywhere would crush even major cities. No doubt it could be done, but they would squander more than the $107M trying to get out of paying it.

Re:MSFT will bully the state... (1)

Frosty Piss (770223) | more than 4 years ago | (#29510999)

... and threaten to move out. If MSFT leaves or even reduces force, greater Seattle's retail and real estate would be crippled, not to mention sales tax and property tax revenues. I'd like to see those taxes paid too, but unfortunately MSFT has the greater bargaining chip here.

The parent is hardly "insightful". Have you been to Redmond? Microsoft doesn't own just a few buildings there and in the rest of Puget Sound. Microsoft isn't going anywhere, it's not feasable from a practical standpoint. Microsoft doesn't have a "bargaining chip" about moving when the threat to leave simply isn't realistic.

Re:MSFT will bully the state... (1, Interesting)

Anonymous Coward | more than 4 years ago | (#29511047)

Original poster speaking here. If you don't think they can move, check out a place like Flint, Michigan, or any of the other towns that suffered a similar fate. I can't help but look at Bellevue and think that all of that extravagance is extremely temporary.

Prepare for the usual comments (3, Insightful)

erroneus (253617) | more than 4 years ago | (#29510753)

Among my favorite are "but Microsoft will just move outside of the U.S." Like hell they will. You think all those C-levels, VPs and billionaire executives will want to move? And the interruption of process? The huge shift in culture? And the public opinion of Microsoft will surely enable any Microsoft competitors. And finally, if they moved out of the U.S., they wouldn't stop selling to the U.S. and you can bet there would be LARGE tariffs imposed on the import of Microsoft Software and could you imagine the new problems they would have to face being a "foreign business" selling critical systems software and infrastructure products to sensitive areas of government? Bad enough they are local, but a foreign company selling the US government crappy software?

The various problems and changes that would result are too many to imagine.

Probably best that Microsoft pay their damned taxes like everyone else.

Re:Prepare for the usual comments (1, Interesting)

Anonymous Coward | more than 4 years ago | (#29510871)

What are you talking about? If they are burdened by Washington they can just move their developers to Nevada or another "friendly" state. Do you think Washington is the magical place where software developers perform amazingly (if you do think so, I bring Vista to the table)? Washington is making millions by taxing Microsoft employees, they can't afford to lose them.

Re:Prepare for the usual comments (0)

Anonymous Coward | more than 4 years ago | (#29510943)

Unless they moved to Canada...

Re:Prepare for the usual comments (0)

Anonymous Coward | more than 4 years ago | (#29511057)

No, no.

We're talking about Microsoft moving outside the United States.

Re:Prepare for the usual comments (4, Insightful)

Sir_Sri (199544) | more than 4 years ago | (#29511009)

As though all of their competitors aren't essentially doing that already. Even MS has development in India now (and other countries, not all of which count as third world). We (on slashot) got all up in arms over IBM offering employees the chance to keep their jobs by moving to india, the main architecture for intel desktop CPU's was developed in Israel. Sure, moving out of the US would get them bad press in one place, but it would get them really good press elsewhere. Everywhere outside the US assumes the US is using MS to spy on them (which it probably is) and the US assumes everyone else is trying to inject people into big companies to spy on them (they are).

The nature of the modern world is that at least half of anything worth having is made somewhere other than where you are. Want to buy fighter jets? Good luck getting electronic control systems and displays that aren't made in east asia. Want to buy software? There are developers contributing code from all over the world.

As it is RIM (blackberrry) is a foreign company selling critical systems infrastructure in the US. And the US has a plethora of free trade agreements, MS could very smartly move its official HQ to somewhere cheap (Switzerland), with free trade to the US and watch the government cringe as it has to fight through years of losing court cases on whether imposing tariffs are legal.

As the guy above says, they could just move to a more tax advantageous state too rather than jump ship entirely.

Re:Prepare for the usual comments (4, Insightful)

Zalbik (308903) | more than 4 years ago | (#29511011)

Or they could just move 140 miles north to Canada. Very minor shift in culture, no language barriers, no tariffs, and the US government already uses a proprietary Canadian OS on some of their devices [rim.com].

Or they could just move to Nevada.

In any case, the article doesn't provide any evidence that Microsoft is doing anything illegal, though they heavily imply it. The article links to a couple of other sites (written by the same author, how original!) that basically spew the same nonsense, but there is no indication why Microsoft can't do exactly what they are doing.

Re:Prepare for the usual comments (1)

FooAtWFU (699187) | more than 4 years ago | (#29511029)

It's true. They're unlikely to move overnight. There have been studies, you know. However, at some point or another various companies, including Microsoft, will think twice before exposing their revenue to the Washington State tax regime. It could inhibit the local economy in hard-to-measure ways.

On the other hand, if they *did* want to be crazy and move all their developers to Texas (canonical big state with cheap living and reasonable exposure to the software industry), this would be the perfect time to do it. What, do you think all the developers developers developers are going to magically find a job somewhere else in Washington State in this market? You'd have them over a barrel. And for a significant fraction of the state of Washington's taxes, it be worth whatever brain-drain there is.

Re:Prepare for the usual comments (2, Insightful)

Dahamma (304068) | more than 4 years ago | (#29511033)

Microsoft has already started moving/building data centers out of Washington state, which is both perfectly legal and bound to hurt the shortsighted WA state govt that thought it could just start changing tax laws on companies without any repercussions.

I agree with a previous poster that trying to blame Microsoft (a company that is probably one of the biggest sources of economic growth in the Seattle metropolitan area) for their budget problems is idiotic. All companies by nature will look for ways to get breaks and increase their bottom line. Consider Boeing, which received over $3B in TAX BREAKS (yet, officially given away by the WA govt) to keep manufacturing plants in the state - which they are barely living up to, anyway.

You sound unbelievably greedy (2, Insightful)

Kohath (38547) | more than 4 years ago | (#29511079)

How much of Microsoft's software did the state of Washington write?

There are plenty of places to do business where you don't have to pay a huge tribute to satisfy the greed of the local warlords. Some of them are even in the United States.

The State of Washington should try being less greedy. They should do less and ask the dependent class to do more for themselves.

As always, my first suggestion is for anyone on government housing assistance to be required to live with a roommate to share housing expenses. It's good enough for college students, it should be good enough for welfare recipients.

Tax and Jurisdiction (2, Insightful)

anonicon (215837) | more than 4 years ago | (#29510757)

Well, I guess the Washington government could try to pass a law that taxes a company for a subsidiary whose primary location is in a tax-free zone. If it stood up to the inevitable legal challenge, I have no idea what the unintended consequences would be for the tax landscape.

Re:Tax and Jurisdiction (4, Insightful)

mabhatter654 (561290) | more than 4 years ago | (#29510983)

The word is "Value Added Tax" boys and girls. This is why states like Michigan have them. Companies can "move the cheese" all they want, but each organizational unit has to account for it's "productivity" i.e. the added value of their step, not just whether they made "cash profit" in order to satisfy SEC and GAPP rules. Manufacturing states learned long ago that the parent company will always make manufacturing into "cost centers" that always lose money on their operations because they don't "sell anything", both to stiff workers and the taxman. They learned to make each part of the company rate the "value" of it's incoming raw goods versus the "upstream" items. The numbers have to add up on "somebody's" books so it's easier to get the tax money where the work is done.

VAT is closer to what we plebs pay as "income tax" rather than just pure "profits tax".

Re:Tax and Jurisdiction (0)

Anonymous Coward | more than 4 years ago | (#29511007)

I currently live in Michigan.

I wouldn't cite Michigan as the 'right' way to do things. Plenty of budget shortfalls here, plenty of unemployment (15%)

Re:Tax and Jurisdiction (1)

miracle69 (34841) | more than 4 years ago | (#29511063)

How's Michigan's economy and social programs doing with such taxes?

In the crapper? Thought so.

Cost of Relocation? (1)

Freaky Spook (811861) | more than 4 years ago | (#29510759)

I wonder what it would cost Washington if MS decided to completely relocate to another state?

Generally when Governments go after companies hard enough for tax and regulation, it becomes a financial incentive for the company to move on.

I'm sure there would be plenty of other states interesting in garnering the juggernaut a MS head office would bring to their state.

Typical liberal response (-1, Flamebait)

shellster_dude (1261444) | more than 4 years ago | (#29510767)

This is the typical liberal response to a money issue: blame big capitalism. The only reason Microsoft stays in Nevada is that it lowers their overhead. If they are still forced to pay taxes, they won't pay taxes. They will move to another state, or worse yet, ship more jobs over seas, which means that there are less American jobs. If taxes are so high that tax dodging becomes a way of life for big business to thrive, raising taxes will not fix the problem.

I know this post will be modded for flamebait, but I think the original article reeks of flamebait.

Re:Typical liberal response (1)

Shados (741919) | more than 4 years ago | (#29510803)

Don't confuse liberal with democrat. A liberal would say "if you're not breaking the law, have fun". And while this is a major loophole in the law, they're still not breaking it outright.

As you said, if they start screwing Microsoft over just to help people make a quick buck or a million(helllo European Union? I'm looking at you!), Microsoft will just move, and then they can kiss goodbye to the income task (which is most likely VERY significant)

Re:Typical liberal response (1, Informative)

TheGratefulNet (143330) | more than 4 years ago | (#29510865)

actually, liberals reserve the right to JUDGE the law, itself.

dems and repubs are stuck in the 'its a law, that's all there is to it, follow it' idea. but liberals want to think for themselves, at every turn. a Good Thing(tm) as it raises us from robots to thinking human beings.

while I'm at it, I'll put in a plug for jury nullification (fija.org). another concept that 'law abiding citizens' mostly don't know about or think is 'wrong' somehow.

Re:Typical liberal response (1)

beallj (594139) | more than 4 years ago | (#29510901)

The state of Washington actually has no income tax.

Re:Typical liberal response (1)

Shados (741919) | more than 4 years ago | (#29511019)

Whoops. That kind of puts a big dent in my argument now, doesn't it?

Well, thats embarassing, but thats what I get for not doing my research.

Re:Typical liberal response (0)

Anonymous Coward | more than 4 years ago | (#29510875)

I know this post will be modded for flamebait, but I think the original article reeks of flamebait.

Although I disagree with several points in your topic, it's worth the debate. There's no reason for you to play that cliche.

If taxes are so high that tax dodging becomes a way of life for big business to thrive, raising taxes will not fix the problem.

Quick Google on corporate tax rates over time [taxpolicycenter.org]

If what you are predicting is true, how you you account for the increase in business growth (not counting depressions) over the last 50 years? Effective tax rates have dropped by a rate of 50%

Re:Typical liberal response (1)

gbarules2999 (1440265) | more than 4 years ago | (#29510885)

I know this post will be modded for flamebait, but I think the original article reeks of flamebait.

Stop your damn complaining. If you had taken out the political skewering and generalization then you wouldn't have to whine about flamebait modding in the first place. What you said is Insightful, but your crying makes you look anything but.

Re:Typical liberal response (0)

Anonymous Coward | more than 4 years ago | (#29510989)

I just modded him flamebait. I always mod when people say things like "I know I will be modded down" If they know that they should not post it. If they do they can expect me to down mod them for being assholes.

Anon for mods...

Not surprised. (0)

Anonymous Coward | more than 4 years ago | (#29510775)

Everyone knows that when a state raises taxes, business leaves the state. This isn't a frickin mystery, its simple economics. At least they aren't moving it and its software development to India. This is a first hand example of WHY liberals tax and spend policies FAIL.

Re:Not surprised. (2, Interesting)

anagama (611277) | more than 4 years ago | (#29510889)

This isn't a liberal tax and spend issue. This is an issue of a giant company guzzling state services (fire, water, police, increased road traffic, etc. etc. etc.) and letting the little guys pick up the tab. You know what? If MS isn't interested in paying its way, than fuck 'em. And yeah, they could move to Oklahoma or India, but how many of the really valuable employees are going to want to live in a backwards locality? It could be a death sentence for MS just because of the brain drain, not to mention the turmoil caused by moving.

Re:Not surprised. (2, Interesting)

Anonymous Coward | more than 4 years ago | (#29511083)

Really? Cause all those employee's don't pay for fire, water, police, road traffic and other things. These things are used by people not the businesses I'm sick of fucks like you who want to drive out business.

It WOULD be nice, would probably help most states. (3, Insightful)

Globally Mobile (1635415) | more than 4 years ago | (#29510787)

The author says at the end...

2. I single out Microsoft because it's, by far, one of the biggest offenders, but I would like to see the uniform enforcement of state tax law to all corporations using out of state facilities to minimize tax payments.

I definitely agree. Would be great. But as someone stated above, you can't expect one company (in this case Microsoft) to be forced to follow a rule and then not force the rest of the companies. Well, I suppose you could, but in all fairness, should Washington, or any other state, be able to single out one offender, leaving others to get away with the same? Uniformality in this would be best.

If it was legal, what can they do? (2, Insightful)

PhrostyMcByte (589271) | more than 4 years ago | (#29510795)

They're just looking for an easy way out, to make Microsoft pay for the state's own economic blunders. Surely Washington has known about this for a while but chose to ignore it. They can close the "loophole" now, but I don't see why it is fair for them to make it retroactively illegal. I actually thought such ex-post-facto laws were illegal themselves.

You Win (-1, Flamebait)

Anonymous Coward | more than 4 years ago | (#29510867)

"They're just looking for an easy way out, to make Microsoft pay for the state's own economic blunders."

You just knew some idiot was going to post the exact same dopey drivel...

Congrats PhrostyMcByte! You were the idiot.

Re:If it was legal, what can they do? (3, Informative)

JeffSh (71237) | more than 4 years ago | (#29510873)

The guy writing this article is some loony activist one man army who's been arguing this issue since at least 2004. Who knows his motivations, but let's not read into this article as though it's some sort of concerted effort that Washington Legislators are taking seriously.

more of the same, apparantly (5, Interesting)

JeffSh (71237) | more than 4 years ago | (#29510811)

I don't think the guy who writes this article really understands tax law. Neither do I really, but atleast I'll admit it. It seems to me that I remember Tax Avoidance being perfectly legal and accepted. I really think he misunderstands the idea that there's some existing tax law to be enforced that applies to Microsoft's actions. The software is licensed out of NV, hence, NV law applies. There are major jurisdictional issues inherent in taxation law and so far as I can tell as a layman, there's nothing afoul of any regulation going on here.

If there were, you can be sure Washington State would have their hands in Microsoft's pockets already.

That's kind of why most corporations are incorporated in Delaware, too. There's jurisdictional issues being blatantly ignored by this person in order to make a point and that is not justified.

That all said, I did some more reading and it looks like this guy has barked up this tree before.
http://crosscut.com/2008/02/02/microsoft/11167/ [crosscut.com]
which was posted to Slashdot back then
http://slashdot.org/article.pl?sid=08/02/04/1520219 [slashdot.org]
and a followup with his anti-arguments to the posts from Slashdot back then.
http://www.idealog.us/2008/02/top-reader-excu.html [idealog.us]

Oh and 2004 too:
http://slashdot.org/article.pl?sid=04/10/01/2137228&tid=109 [slashdot.org]

You'll notice, a year ago, he supposedly already addressed all the issues everyone here could possibly present. Unfortunately, he's also completely ignored the one about the constitutionality of taxation and jurisdiction and focuses more on wishy washy sort of justification arguments made that appeal more to a sense of right or wrong, rather than the case law regarding jurisdictional tax issues.

Career campaigner on this issue, hey Jeff? Too bad you've wasted 5 YEARS on this subject and you're never going to get anywhere because Microsoft is DOING NOTHING WRONG.

Re:more of the same, apparantly (2, Funny)

B4D BE4T (879239) | more than 4 years ago | (#29510931)

...because Microsoft is DOING NOTHING WRONG.

I wouldn't say they're doing nothing wrong. ;)

C'mon - like this isn't standard practice (1)

93 Escort Wagon (326346) | more than 4 years ago | (#29510831)

I hate it when corporations pull this sort of crap - but most of them do it because the law allows them to. Besides, as a fellow Washingtonian, I am reasonably sure that the state government would have cut some sort of tax deal with Microsoft if the company ever threatened to move. We HAVE seen it before, remember.

If you want to stop companies from doing this sort of thing, you have to change the law. And changing it in one state will just make things worse (for that state), since there are always other states with depressed economies that are willing to drop trou' and bend over in hopes that that handsome, rich corporation might just decide to stay more than one night if they show them a good enough time.

Re:C'mon - like this isn't standard practice (3, Informative)

TheGratefulNet (143330) | more than 4 years ago | (#29510849)

correct; if lawmakers don't want corp entities USING the laws, then why have the bogus abusable laws in the first place?

"waaaaah! they're taking money from my state."

hey, its way worse than that; most companies in tech are sending money OFFSHORE, never to come back again, anyway. playing the 'tax and income game' left and right.

close the loopholes and stop letting corps get away with murder.

duh!

but you cannot force a company NOT to use things that are legal. I hate MS but even I can see this.

Re:C'mon - like this isn't standard practice (0)

Anonymous Coward | more than 4 years ago | (#29511045)

"Closing the loopholes" isn't sufficient - how about setting a date for these companies to get their stuff in order, then SEIZING anybody who's still jacking the tax laws around. It's the same thing that happens to plain old jackoff "tax protesters" every day.

Re:C'mon - like this isn't standard practice (0)

Anonymous Coward | more than 4 years ago | (#29510893)

Yes. The real problem here isn't Microsoft. The real issue is we've created these giant psychopathic "persons" called corporations. Every time an executive says "fiduciary responsibility to our shareholders", an angel gets AIDS.

Chicken and the Egg (1)

NotQuiteReal (608241) | more than 4 years ago | (#29511015)

because the law allows them to

Ok, I have to substitute poultry here, to make the analogy work, but would the Goose who lays the golden eggs nest somewhere where the law is unfavorable in the first place?

At the end of the day, there is always a price that is too high, if there is an alternative. For MSFT to up and move is expensive. But still, how hard do you squeeze the goose?

Lease Windows and Office license from Moldavistan (0)

Anonymous Coward | more than 4 years ago | (#29510857)

How about we start leasing our Windows and Office licenses from an office here in Moldavistan (fictional, but there are bound to be some real ones), where there is no copyright law whatsoever. Pay $1 per seat, comes with official receipts from Moldalicensing Ltd. with added waivers regarding any EULAs that might pop up being not valid.

Microsoft Is the Epitome of Evil (2, Insightful)

curmudgeon99 (1040054) | more than 4 years ago | (#29510861)

Here we have yet another example of the Evil coming out of Microsoft. The State of Washington and its taxpayers have spent a pretty bit of coin providing an educated workforce for Microsoft, by creating all the infrastructure such as the electric utilities, the roads, the police, fire and the rest. Without all of these public services, companies like Microsoft would be much, much less profitable.

If these companies are so hell bent not to pay taxes--then why don't they move to Russia? When I lived there, zero taxes were taken from my pay. Companies paid hardly any taxes. Oh yeah, they had to pay the Russian Mafia because the tax-starved government had no power.

So, we see the most anti-American behavior imaginable is some hugely wealthy company like Microsoft scamming the taxpayer. I hope that the state of Washington hits M$ for their entire back taxes. Microsoft could pay it out of petty cash.

Re:Microsoft Is the Epitome of Evil (1, Interesting)

Anonymous Coward | more than 4 years ago | (#29510911)

There is currently a new bridge being built over state route 520, which runs right through the Microsoft campus. This is being done to alleviate congestion on the 40th Street bridge. This new bridge will basically link two Microsoft parking lots. It will be a public road but leads to no place of interest if you're not a Microsoft employee. Guess who pays for the construction costs? Hint: it's not Microsoft.

Re:Microsoft Is the Epitome of Evil (1)

daath93 (1356187) | more than 4 years ago | (#29510961)

I am paying the bill because its being paid by Obama's federal stimulus plan. And I live in Oregon and probably wont even SEE the overpass. My problem is with the stimulus bill, not with someone using the money provided. Oh wait, that's not in going with SOP of the Obama admin, blame everyone but the people who are actually responsible. My apologies.

Re:Microsoft Is the Epitome of Evil (1, Informative)

Anonymous Coward | more than 4 years ago | (#29511035)

This new bridge will basically link two Microsoft parking lots. It will be a public road but leads to no place of interest if you're not a Microsoft employee. Guess who pays for the construction costs? Hint: it's not Microsoft.

Horse Shit. It connects the HP campus and the Group Health campus. Anyone who lives and works on the east side knows this. It will be a public street, open to all, and Microsoft is paying 50% of the construction costs. Go spread your lies somewhere else.

Re:Microsoft Is the Epitome of Evil (2, Informative)

maxume (22995) | more than 4 years ago | (#29510987)

When I take a look around, I'm pretty sure that avoiding taxes is a very American behavior.

(do note that Microsoft employees do pay things like property tax and fuel tax, it isn't as if 100% of their activity is free riding, it would take a very sophisticated analysis to clearly decide if the presence of the company is a net drain or benefit to the state's resources (though I would not be particularly surprised to find out that the presence of thousands and thousands of wealthy people was actually a good thing...))

Doesn't make sense (MS not doing anything wrong) (4, Insightful)

kenh (9056) | more than 4 years ago | (#29510879)

There is this line in the article: "Just by enforcing the state's existing tax law from 2008 onwards, we could reduce Washington's revenue shortfall by more than 70 percent." What? The law that says Washington state can tax business transacted in another state? They want to CHANGE THE LAW, not enforce existing law. Maybe if the state were to partner with MS and not view it as their own personal ATM, they could close a bit of their defecit. Is the Washington State economy really based on anything more than Software, Airliners, "The World's Largest Store" and over-priced coffee?

Re:Doesn't make sense (MS not doing anything wrong (2, Interesting)

anagama (611277) | more than 4 years ago | (#29510957)

Simply deem the licenses created in WA and sent to NV where they were sold. A license is sort of fictional anyway. Tax the exported licenses.

Re:Doesn't make sense (MS not doing anything wrong (0)

Anonymous Coward | more than 4 years ago | (#29510995)

Is the Washington State economy really based on anything more than Software, Airliners, "The World's Largest Store" and over-priced coffee?

No, it isn't.

Re:Doesn't make sense (MS not doing anything wrong (0)

Anonymous Coward | more than 4 years ago | (#29511017)

I guess you missed Boeing moving their head office to Chicago. Tax reasons and kickbacks from the state there.
Maybe Microsoft should do the same?

Basic Economics. (2, Insightful)

Lord Kano (13027) | more than 4 years ago | (#29510939)

This is exactly the kind of thing tax raisers refuse to understand. When taxes are too high, people will change the way they do business. It's perfectly legal to do this.

The term "Tax Dodger" is thrown around like it's a bad thing, it's not. It's smart to dodge taxes. In fact, many people do it. We use online retailers to avoid state sales tax. People who live near state lines will drive to the other state to make big purchases if there is a sales tax savings to be realized. I have cousin who travels from MD to DE to do just that.

If they make the tax too burdensome, we can watch Microsoft pick up and move from Washington to some other state that's not so arrogant as to assume that all money is theirs.

LK

All corporation cheat the public out of tax (-1)

Anonymous Coward | more than 4 years ago | (#29510953)

Boeing, a big employer in Washington state avoids taxes by flying the buyer in their brand new plane to over international water, where there is no tax!
So that is $173 billion in sales gone.
69.9 percent of Drug company profits are in offshore havens

No Corporation Pays Any Taxes... Ever (4, Insightful)

sakti (16411) | more than 4 years ago | (#29510963)

Basic economics. Corps don't pay taxes. Taxes are a cost. Costs get passed on to customers, shareholders and employees. They get passed on to you. You who buy any products made by corporations. You who has money in a 401K, Roth or any form of interest bearing account. You you work for a corporation.

There is no one else. Get over it.

Re:No Corporation Pays Any Taxes... Ever (0)

Anonymous Coward | more than 4 years ago | (#29511103)

maybe so but then again not everyone is willing to pay that passed on cost and sales go down, market share goes down, and other problems ensue.
Lets say Windows 7 had a huge license tax which it passed onto the consumer increasing to the point where Mac's became cost effective.. Imagine what would happen then

America's new strategy (2, Insightful)

Anonymous Coward | more than 4 years ago | (#29510975)

Soak the rich.

We need to quit being assholes. Tie taxes to consumption and be done with it. Quit trying to rob the successful to pay for your shitty entitlement programs.

So we can just have a vacation home (0)

Anonymous Coward | more than 4 years ago | (#29511091)

in a state with no income tax and get out of paying state taxes?

Sweet!

Thanks MS, your lying cheating ways have shown me the light.

Microsoft the 3rd largest employer in WA (3, Insightful)

dirkdodgers (1642627) | more than 4 years ago | (#29511097)

So help me understand this:
1. Microsoft is the 3rd largest employer in your state
2. You are in a recession
3. You have a 9.2% unemployment rate

4. You want to raise taxes on business.

So that your government has more money to redistribute to people who are not working, who lost their jobs because companies like Microsoft couldn't afford to keep them on in the first place.

Let me propose an alternative.

Reduce your spending and reduce taxes so that you can afford to pay your bills, and Microsoft can afford to rehire your residents.

Use tax (2, Interesting)

PPH (736903) | more than 4 years ago | (#29511123)

Like our sales tax, this license tax is actually a use tax. Its collected by the vendor at the point of sale, but its based upon the jurisdiction where the product is to be used. So the only revenue WA state is going to collect is that on the sales to WA state residents and businesses. Businesses in the state are subject to audits and must show where the appropriate use tax has been paid, either in the form of a sales tax, or via their WA State dept of revenue tax returns. Anyone buying goods or services who can document a residence or business outside of WA state are exempt from the tax anyway (their home state may have similar taxes that apply). Boeing does the same thing with its airplanes (even before it became an Illinois based corporation).

Microsoft (and other companies) often sell through offices in states with no taxes. Not to avoid paying them, which they don't have to anyway. But to avoid having to document sales to exempt individuals and companies in 49 other states. Since its the duty of the end user to see to it that use taxes have been paid, the state would be better off chasing after its businesses (which it already does, to a point) and residents (which it typically lets slide) for the taxes owed.

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