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[News] [Rival] Microsoft Tax Dodge Makes Front Page of Seattle Weekly

  • Subject: [News] [Rival] Microsoft Tax Dodge Makes Front Page of Seattle Weekly
  • From: Roy Schestowitz <newsgroups@xxxxxxxxxxxxxxx>
  • Date: Tue, 09 Feb 2010 02:42:31 +0000
  • Followup-to: comp.os.linux.advocacy
  • Newsgroups: comp.os.linux.advocacy
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Cover Story: Washingtonâs Candy Land of Tax Breaks

,----[ Quote ]
| As our cash-strapped state prepares to cut 
| services for the poor and mentally ill, 
| billions of dollars in tax breaks and 
| exemptions are still being doled out.
| [...]
| Deferral of state and local retail sales and 
| use taxes are also allowed for the 
| construction of buildings for high-tech 
| projects involving research and development. 
| That has Microsoft and its ever-expanding 
| campus written all over it, allowing MS to 
| avoid sales tax on construction costs, 
| materials, and new equipment, for example. 
| Another 500 small and large companies also 
| benefit, says the state. The exemption was 
| created in 1994 and extended in 2004 for 
| another 10 years. Over a decade, that's $650 
| million the state is not raking in.
| Almost 1,700 high-tech firms also share 
| another $50 million in B&O tax credits for 
| research and development under an exemption 
| that was also renewed in 2004 for another 
| decade. And a $12 million property-tax break 
| goes to companies that use custom computer 
| software.
| Microsoft, incidentally, has also avoided 
| paying a ton of state taxes by moving 
| offshore, so to speak. According to writer 
| and ex-Microsoftie Jeff Reifman, Microsoft 
| opened a small Nevada office in 1997 to 
| record software-licensing revenue and skirt 
| Washington's half-percent wholesale tax on 
| software-licensing royalties. Reifman 
| estimates that has helped the company of 
| billionaires Bill Gates and Paul Allen avoid 
| more than $700 million in Washington taxes. 
| With interest and penalties, the total 
| exceeds $1 billion.


An Open Letter to Microsoft CEO Steve Ballmer: Quit Dodging Washington Taxes



Gregoire Proposes to Redefine Economic Nexus

,----[ Quote ]
| The post seems to focus on companies out of
| state doing business in Washington. It does
| not clearly address Microsoft which both has
| an extensive physical footprint in Washington
| and uses Nevada to record revenue in an
| attempt to evade Washington's B&O Royalty
| Tax.
| While we are in favor of clearer definition
| of Nexus in relationship to these taxes, it's
| important to focus on the potential
| illegality of Microsoft's existing accounting
| methods to dodge the royalty tax. We continue
| to believe Microsoft's historical behavior
| and current actions represent tax evasion and
| can and should be cracked down upon by the
| Department of Revenue.


Washington State Revisits Data Center Tax Break


State Legislature considers tax break for new data centers


Microsoft Dodging Taxes on Sales to Local Cities and State Agencies

,----[ Quote ]
| In other words, while Washington cities and
| state agencies think they are buying local,
| they're actually purchasing software through a
| scheme designed to provide cover for Microsoft
| to evade the state's B & O Royalty Tax.
| Over the past twelve years, Microsoft has
| avoided paying an estimated $1.24 billion in
| taxes, interest and penalties on its software
| licensing revenue. Washington State's current
| projected budget deficit is $2.6 billion.


Quincyâs Gain: Huge Growth in Tax Revenue

,----[ Quote ]
| That spigot of revenue may be short-lived due
| to the stateâs stance on data center tax
| incentives. Microsoft announced in August
| that it was migrating its Windows Azure cloud
| computing infrastructure from its data center
| in Quincy to another Microsoft facility in
| San Antonio. The reason: Microsoftâs
| unhappiness with tax policies in Washington
| state.


More companies are disclosing their political activity

,----[ Quote ]
| Monday, the Center for Political
| Accountability will announce that software
| giant Microsoft, Time Warner, Campbell Soup
| and Wisconsin Energy have agreed to detail
| their trade-association donations, along with
| other political spending.
| Dan Bross, Microsoft's senior director of
| corporate citizenship, said the company
| wanted "to lead by example." Microsoft has
| posted its political-related dues online for
| the first time. The largest payment: $2.1
| million in fiscal year 2009 to the Computing
| Technology Industry Association, a high-tech
| trade group.


White House Forecasts Job Growth Next Year

,----[ Quote ]
| How can the US Create jobs? Here's a simple
| way that won't cost taxpayers a dime.
| How? Eliminate H-1B and L-1 Visa Fraud and
| abuse.
| What can I do right now to change this?
| Boycott Microsoft. Microsoft is the largest
| and most abusive foreign visa worker
| employer.
| * Foreign H-1B workers "displace qualified
| American workers"
| * H-1B workers "substantially deprived U.S.
| citizens of employment."
| * 20% + USCIS audited guest worker visa
| applications are fraudulent
| * Foreign H-1B workers âsubstantially exceedâ
| 241,000 unemployed American tech workers in
| the same field
| How did this happen?
| Corporate Greed and bottomless lobbyist
| funding from corporations including
| Microsoft. Convicted felon and H-1B program
| mastermind, Microsoft lobbyist, Jack Abramoff
| convinced Congress (without opposing
| testimony) to pass laws that make it legal
| for employers to lay off American citizens,
| and recruit their foreign visa worker
| replacements exclusively offshore.
| The good news
| S887 - This bipartisan Durbin/Grassley bill
| reform will crack down on corporate visa
| fraud and abuse and outlaw the corporate
| bypass of US talent and exclusive recruiting
| offshore for US jobs in the USA.
| Employ Americans Act â The Sanders/Grassley
| bill will outlaw US employers from firing US
| citizens and exclusively hire their
| replacements from other countries.
| Simple things YOU can do TODAY to change the
| US jobs crisis
| 1. BOYCOTT Microsoft.
| 2. Insist your elected officials support
| Employ America Act and S887.
| If they donât support these bipartisan bills,
| ask why and CHASE THE MONEY. Who are their
| corporate funding contributors?
| Actions and Deeds NOT Lip service.
| What are YOUR politicians doing about the
| jobs crisis?
| Are they co-sponsoring/sponsoring these
| bipartisan bills?
| Whatâs their voting record?
| Are they fighting for unemployment and COBRA
| benefits?
| Dead giveaways your politician will do ZERO
| to create US jobs for US citizens
| Political funding from Microsoft, Compete
| America, and Indian companies
| B.S. Detector Corporate Greed funded lies â
| keywords âInnovationâ, âBest, and Brightestâ,
| globalization, xenophobia.
| This issue is the bulls eye of corporate
| greed and political corruption. Hence, a
| consumer boycott of Microsoft has more impact
| than expecting a broken, corrupt system to
| change.
| Remind your elected officials they were
| elected FOR the people, BY the PEOPLE, not
| BUY Corporate GREED.
| Tell them to end corporate visa fraud and
| abuse. American citizens, people who have
| paid their dues and taxes must have a fair
| chance to compete for jobs in our own
| country.


Video: Exploring Microsoft's licensing taxes


Staff growth at Microsoft may ramp up

,----[ Quote ]
| The 11 new jobs that Microsoft announced at
| its Reno operation last week might be the
| harbinger of something bigger.
| After all, the company launched its
| licensing operation in Reno with only 40
| employees in 1997. Today, the Microsoft
| Licensing GP office employs 250 fulltime
| Microsoft staff and nearly 400 additional
| contract workers.
| [...]
| Microsoft Licensing GP in Reno handles
| support of licensing agreements with
| business customers and other organizations
| in North and South America.


3,088 Taxpayers Paid the B&O Royalty Tax in 2009

,----[ Quote ]
| According to the Department of Revenue,
| 3,088 taxpayers (or SUCKERS! as
| Microsoft's CEO Steve Ballmer might call
| them) paid B&O Royalty Tax in 2009.
| Below is the history of B&O Royalty taxes
| paid in Washington since 1999 (source: Wa.
| Dept. of Revenue via e-mail). Note: I
| calculated the taxes paid column at .00484
| of taxable revenue.
| While $6.3 million in royalty taxes were
| paid in '09, if Microsoft had been paying
| the tax on its $18.7 billion in licensing
| revenue - the state should have recorded
| more than $87.6 million in tax receipts.
| This may explain why Ballmer has so far
| refused to respond to our call to open up
| Microsoft's Washington and Nevada tax
| records.


Microsoft and licensing taxes, on KUOW

,----[ Quote ]
| Appearing on KUOW's "The Conversation" on
| Monday was Jeff Reifman, a former Microsoft
| employee who has been writing about
| Microsoft's software-licensing practices and
| whether they are illegal.
| He asserts that Microsoft sidesteps Washington
| tax law by licensing its software out of an
| office in Reno, Nev. Nevada has no software-
| licensing tax; Washington does.


Reno's Microsoft outpost has grown from 40 to 250 employees

,----[ Quote ]
| âThis is an attempt for people to know
| more about us,â said Mary Ellen Smith,
| general manager of the Reno operation
| which employs 250 people.


Now Obama is driving Microsoft overseas

,----[ Quote ]
| It takes an incredibly powerful company to threaten the U.S. government in
| hopes of impacting a significant decision, but thatâs precisely what
| Microsoft is doing. Microsoft CEO Steve Ballmer made headlines when he
| publicly attacked President Barack Obamaâs plan to cut tax breaks on U.S.
| companiesâ foreign profits, a plan which is currently awaiting Congressional
| approval. Mr. Ballmer suggests that if the tax succeeds, Microsoft may begin
| a significant move out of the U.S., taking with it tax revenue and jobs. He
| states, âIt makes U.S. jobs more expensive. Weâre better off taking lots of
| people and moving them out of the U.S. as opposed to keeping them inside the
| U.S.â
| [...]
| Mr. Ballmer, perhaps the most outspoken critic, did acknowledge that the
| Obama proposal preserved research and experimentation cost tax breaks. He
| warned, though, that the cuts to foreign exemptions would raise the cost of
| Microsoftâs 56,552 U.S. employees. He says this could necessitate moving them
| overseas. Microsoft was previously embroiled in a controversy over whether it
| should lay off foreign workers before U.S. ones.


Ballmer Says Tax Would Move Microsoft Jobs Offshore

,----[ Quote ]
| Microsoft Corp. Chief Executive Officer Steven Ballmer said the worldâs
| largest software company would move some employees offshore if Congress
| enacts President Barack Obamaâs plans to impose higher taxes on U.S.
| companiesâ foreign profits.


Ballmer Says Tax Would Move Microsoft Jobs Offshore


Tax plan would send jobs offshore, Ballmer says


Microsoft speaks against foreign profit tax proposal


Microsoft debt offering raises questions about plans for funds

,----[ Quote ]
| Microsoft, which has historically avoided borrowing money, this morning took
| the next step in its previously announced plan to raise funds through a
| public debt offering. The company made the move in a preliminary prospectus
| filed with the Securities and Exchange Commission.


How Obama's tax reforms could impact Microsoft's bottom line

,----[ Quote ]
| The debate hinges on policies that let companies with international
| operations avoid higher U.S. tax rates by reinvesting their foreign earnings
| overseas. The Obama administration last Monday detailed its plan to put a
| damper on that practice.
| "Currently, businesses that invest overseas can take immediate deductions on
| their U.S. tax returns for expenses supporting their overseas investments but
| nevertheless 'defer' paying U.S. taxes on the profits they make from those
| investments," the White House said in a May 4 briefing document. "As a
| result, U.S. taxpayer dollars are used to provide a significant tax advantage
| to companies who invest overseas relative to those who invest and create jobs
| at home."


Microsoft subsidiary has â477m pretax profit

,----[ Quote ]
| Microsoft Ireland Operations Ltd (MIOL) had turnover of â11.3 billion and
| paid corporation tax of â63.5 million according to accounts just lodged with
| the Companies Office and seen by The Irish Times.


Microsoft Ireland slashes US dividend as profits rise

,----[ Quote ]
| The dividend payment is roughly half the almost â3bn the Irish subsidiary
| remitted to the US headquarters in the financial year ended June 2006.


Microsoft in tax evasion soup

,----[ Quote ]
| Software major Microsoft Corpâs Indian subsidiary has been issued a
| show-cause notice for non-payment of service tax worth Rs 127 crore. The tax
| has been claimed on services offered to Microsoft Singapore by way of
| marketing support.


Tax benefit helped Microsoft's 3Q earnings

,----[ Quote ]
| Turns out Microsoft and Uncle Sam have been going back through the company's
| books from 2000 to 2003. Not knowing how that would end up, Microsoft
| had "over accrued" its tax provision in past quarters, said Colleen Healy,
| general manager of investor relations. With the review settled, the company
| was able to reduce that provision.


Microsoft Leads in Lobbying Largesse

,----[ Quote ]
| Microsoft is leading the tech industryâs charge up Capitol Hill, according to
| statistics released Monday.
| The world's largest software company spent $9 million on lobbyists to make
| its case in issues including taxes and trade, according to statistics
|                    ^^^^^^^^^^^^^^^^^^^^^^^^^
| compiled by the Center for Responsive Politics.


Bill Gates: Rich Individuals Should Pay More Tax, Wealthy Corporations Less?

,----[ Quote ]
| As Taxing Tennessee points out, Bill Gates opposes eliminating the death tax
| but is quite happy to have local and state taxes eliminated for his
| company...


Microsoft EULA lands it with $175m Indian tax headache

,----[ Quote ]
| Basing its ruling on the terms of Microsoft's own EULA (end-user license
| agreement), an Indian court has ordered the company to pay tax on royalty
| income generated in the country, Tax India Online (TIOL) reports.
| [...]
| âUnacceptable tax avoidance typically involved the creation of complex
| artificial structures by which, as though by the wave of a magic wand, the
| tax payer conjures out of the air a loss, or a gain, or expenditure, or
| whatever it may be, which otherwise would never have existed. These
| structures are designed to achieve an adventitious tax benefit for the
| taxpayer, and in truth are no more than raids on the public funds at the
| expense of the general body of taxpayers, and as such are unacceptable.


Cheers not jeers to Speaker Chopp on the Microsoft tax concession

,----[ Quote ]
| The Columbia Basin Herald this past week characterized House Speaker Frank
| Chopp as being a Forrest Gump, "stupid is as stupid does" villain for
| opposing big proposed tax breaks for Microsoft and Yahoo. The tax concession,
| those companies said, were necessary to keep them from fleeing Grant County,
| where they have huge server farms. The requests were similar to the $3.2
| billion in breaks Boeing Co. got from Governor Gary Locke and the Legislature
| when it threatened to take some of its assembly operations elsewhere.

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