Jeff Reifman, a blogger who dubs himself a "Seattle-based technologist, writer and media advocate," has written an extremely interesting post this week about software giant Microsoft, accusing the company of avoiding up to $700 million USD in taxes over the past decade plus by having its software licensing office in Reno, Nevada instead of Redmond, Washington.
Making the "avoidance" even more notable, is that Washington State is currently in the midst of a $430 million USD budget deficit, one that would be turned to a surplus if Microsoft was paying their taxes.
Says Reifman: "Over the past thirteen years, I estimate that Microsoft has avoided paying more than $707 million in B & O taxes on sales of its corporate software licenses. 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."
He continues: "Under the state's .484 percent software royalty tax(lowered from 1.5 percent in 1998 after industry lobbying), I estimate that Microsoft should have paid more than $90 million in 2008 and $87 million in 2009 in state taxes."
Reifman concludes: "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 - perhaps more if damages are awarded through litigation.
Since Microsoft began operations in Reno in 1997, it has enjoyed record-setting revenue of more than $446 billion and profit of more than $124 billion. If it paid its actual tax bill in full today, it would still have more than $24 billion in cash holdings."
We will keep you updated.
Says Reifman: "Over the past thirteen years, I estimate that Microsoft has avoided paying more than $707 million in B & O taxes on sales of its corporate software licenses. 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."
He continues: "Under the state's .484 percent software royalty tax(lowered from 1.5 percent in 1998 after industry lobbying), I estimate that Microsoft should have paid more than $90 million in 2008 and $87 million in 2009 in state taxes."
Reifman concludes: "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 - perhaps more if damages are awarded through litigation.
Since Microsoft began operations in Reno in 1997, it has enjoyed record-setting revenue of more than $446 billion and profit of more than $124 billion. If it paid its actual tax bill in full today, it would still have more than $24 billion in cash holdings."
We will keep you updated.
