tag:typepad.com,2003:weblog-83446199961360140 2012-02-09T17:06:43-08:00 How Microsoft Shareholders Saved $6.1 Billion in Washington State Taxes TypePad tag:typepad.com,2003:post-6a00d83451b2ee69e201676210285d970b 2012-02-09T17:06:43-08:00 2012-02-10T10:29:13-08:00

In response to our letter to Brad Smith, Microsoft PR sent me an email in which they refuse to release the royalty tax data that could vouge for their contention that they did not use their Nevada office to avoid paying more than $1.33 billion in taxes, interest and penalties between 1998 - 2010. "We won't comment beyond saying that Microsoft pays all due taxes in all jurisdictions in which we operate including our home state of Washington, where the company has a major impact on Washington's economy and generates significant state and local tax revenues." - Microsoft's Jeffrey Reading,...

Jeff tag:typepad.com,2003:post-6a00d83451b2ee69e20167620e541d970b 2012-02-09T14:20:03-08:00 2012-02-09T14:41:46-08:00

Following up on our post asking Microsoft to disclose its Washington State royalty tax payments from 1998 - 2010 to back up its claims of innocence, I've written an open letter to Senior Vice President and General Counsel Brad Smith. If Microsoft thinks this blog is spreading misinformation about its Nevada tax dodging, it just needs to disclose the amount of royalty tax it paid in the years 1998 - 2010. Last month, Smith wrote a column in The Seattle Times in which he expressed concern that falling tax revenues are hurting education: "Like many states, Washington continues to battle...

Jeff tag:typepad.com,2003:post-6a00d83451b2ee69e20162fdad6718970d 2011-12-11T15:33:20-08:00 2012-02-09T17:08:22-08:00

Update: Microsoft refuses to release the amounts of its royalty tax payments to Washington State. Beginning with the publication of Citizen Microsoft in Seattle Weekly in 2004, I've reported that Microsoft used its Nevada office to avoid payment of the state's Royalty Tax from 1998 - 2010. I've blogged that the amount of the tax dodge has likely exceeded $1.07 billion (not including penalties). Last week, after John Burbank, Executive Director of the Economic Opportunity Institute, wrote an editorial condemning the company's hypocritical record of tax dodging while advocating for more education funding, Jeffrey Reading, Microsoft's Senior PR Manager wrote...

Jeff tag:typepad.com,2003:post-6a00d83451b2ee69e201539428ebf3970b 2011-12-07T11:42:11-08:00 2011-12-07T11:42:11-08:00

In his Everett Herald column today, John Burbank, Executive Director of the Economic Opportunity Institute, zeroes in on Microsoft's tax dodge and its harmful effects on the state's educational system: Seeds planted by corporate lobbyists in our state's tax code, and fertilized by an obedient Legislature, have grown to the point where waste, fraud and abuse in corporate taxation is crowding out our kids' K-12 education, the paramount duty of the state. ... Microsoft made over $23 billion in profit on $69.9 billion of revenue in its 2011 fiscal year, a tidy profit rate of 33 percent. But apparently the...

Jeff tag:typepad.com,2003:post-6a00d83451b2ee69e2015392cf5d82970b 2011-11-30T15:58:28-08:00 2011-11-30T17:52:14-08:00

Washington State doesn't have a deficit, it just has a destructive array of tax breaks for wealthy corporations such as those highlighted by the Economic Opportunity Institute and Seattle Weekly's ongoing Candyland of Tax Breaks series. Amazingly though, the impact from Microsoft's lobbying and dodging of the state's Royalty Tax is enough on its own to make up the entirety of last year's draconian cuts and the current budget shortfall. Until 2010, Washington State's Royalty Tax required Microsoft to pay about half a percent (.484) of its worldwide licensing revenue in taxes (cumulatively, about $180 billion since 1998). By recording...

Jeff tag:typepad.com,2003:post-6a00d83451b2ee69e2015437661bed970c 2011-11-25T17:06:27-08:00 2011-11-26T00:33:28-08:00

Love to see this agitprop trying to raise awareness about Microsoft's Nevada tax dodge. It's just wrong on the latest facts (photo courtesy of Geekwire): In 2010, the Legislature changed the state's Royalty Tax in Microsoft's favor. The change was led by (wait for it) former Microsoft executive Ross Hunter, Democratic Chair of the Finance committee. The Royalty Tax used to be a .484%* tax on worldwide revenue from software licensing. Microsoft claimed its licensing revenue from its Alter Ego corporate sub-identity in Nevada to avoid the tax. It saved between $1.51 billion and $6.1 billion depending on how you...

Jeff tag:typepad.com,2003:post-6a00d83451b2ee69e2015437346253970c 2011-11-21T17:29:43-08:00 2011-11-21T17:39:30-08:00

TechFlash reports that Microsoft's General Counsel Brad Smith has called for the Governor to end cuts to higher education and is supportive of an increase to our state's sales tax. Microsoft loves the sales tax because it's a regressive tax - meaning that the poor pay a higher percent of their income in taxes than the rich: "People earning less than $20,000 annually pay 17.3 percent of family income toward sales and excise taxes and property taxes, the report said. People making between $99,000 and $198,000 each year pay 7.6 percent toward their tax bill. Meanwhill, people in the top...

Jeff tag:typepad.com,2003:post-6a00d83451b2ee69e2014e86bb30a2970d 2011-03-15T10:59:06-07:00 2011-03-15T10:59:06-07:00

The Seattle Times reports that Microsoft is pushing Washington legislators "to pass a law making it illegal for manufacturers that use pirated software to sell goods in the state." For example, if a large Washington store sold T-shirts made from a company in China and the Chinese company uses pirated copies of Excel at an office in Shenzhen, Microsoft could seek an injunction to prevent the manufacturer from supplying T-shirts to be sold in Washington state. The legislature appears eager to please Microsoft: "'We have a problem internationally with stolen and counterfeited software,' said state Rep. Deb Eddy, D-Kirkland, one...

Jeff tag:typepad.com,2003:post-6a00d83451b2ee69e20147e0457bbf970b 2010-11-30T13:22:35-08:00 2010-11-30T13:27:20-08:00

Today, Governor Gregoire appointed former nine year Microsoft executive Suzan DelBene to run Washington State's Department of Revenue. DelBene's husband Kurt is President of Microsoft's Office Division. DelBene's basically a marketing executive, although she recently ran unsuccessfully to unseat Congressional GOP Rep. Reichert. As far as I know she has no formal background in tax law. Full disclosure: I used to work with Ms. DelBene and for her husband Kurt at Microsoft in the early 1990s. "Gov. Chris Gregorie announced the appointment on Tuesday, saying there's nothing political about the move." Seattle Times The Seattle Times has reported in the...

Jeff tag:typepad.com,2003:post-6a00d83451b2ee69e20134897776fe970c 2010-11-23T17:24:21-08:00 2010-11-23T17:35:35-08:00

As the year draws to a close, I wanted to provide an update for everyone who's followed the story of Microsoft's Nevada tax dodge this year: In October, Microsoft announced record profit of $16.2 billion. The company now has approximately $44 billion in cash and short term holdings on hand. We learned that the company records about half of its revenue at its Nevada licensing subsidiary - outside the reach of Washington's department of revenue. The Washington State Legislature, led by Democrat Representative Ross Hunter, essentially legalized Microsoft's Nevada tax dodge by redefining the state's royalty tax so that the...

Jeff