02.16.10

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Former Microsoft General Manager ‘Infects’ the Debt-saddled Washington Administration, Helps Microsoft Dodge Tax

Posted in America, Finance, Microsoft at 4:13 am by Dr. Roy Schestowitz

Summary: Former Microsoft employee Ross Hunter becomes part of the tax scandal in Washington, which is going bankrupt

WITH a lot of Microsoft- and Gates-hired lobbyists sitting on the government all day, it’s no wonder that things are not changing for the better. Microsoft has far too much influence in the United States government.

Mr. Reifman, who used to work for Microsoft and is currently exposing Microsoft’s massive tax dodge [1, 2, 3, 4, 5, 6, 7, 8, 9], received a comment from Kyle Welsh who says: “Bill’s sponsor, Rep. Hunter retired from Microsoft in 2000.”

Reifman’s latest post had been updated as follows:

Washington to Give Microsoft a $100 Million Annual Tax Cut…and Possible Amnesty on Past Tax Evasion

I’d like to encourage any Microsoft employees with knowledge of any manipulation around the company’s Nevada tax practices to report what they know to the Department of Revenue. Your efforts could benefit Washington citizens as our state teeters on the edge of bankruptcy.

Update: Rep. Hunter is a former Microsoft general manager. Thanks for linking Slashdot, Cory @ BoingBoing, Seattle Weekly, Slog @ The Stranger and a big welcome to Publicola!

Microsoft’s $100 Million Annual Tax Cut

Facing a $2.8 billion deficit and pending insolvency, Washington State’s House Bill 3176 proposes changes to the B&O Royalty tax that would give Microsoft an estimated $100 million tax cut annually and possible amnesty for more than a billion dollars in past tax evasion.
[...]

It’s not like Microsoft has ever paid the royalty tax in full either. Since 1997, Microsoft has evaded an estimated $1.27 billion in royalty taxes, interest and penalties by operating a small office in Reno, Nevada to account for royalty revenue from software licensing.

[...]

We just want to know why the Department of Revenue hasn’t enforced the law as it’s written today. We just want Microsoft to pay its due under the existing Royalty tax rather than having their illegal practice blessed with amnesty at a critical juncture for our state’s finances.

Here is the BoingBoing coverage:

Broke-ass Washington state set to give MSFT $100M annual tax cut and amnesty for $1B in evasion

Facing a $2.8 billion deficit and pending insolvency, Washington State’s House Bill 3176 proposes changes to its B&O Royalty tax that would give Microsoft an estimated $100 million tax cut annually and possible amnesty for more than a billion dollars in past tax evasion.

Under current law, all of Microsoft’s worldwide licensing revenues of approximately $20.7 billion annually are taxable at .484 percent or ~$100.1 million. Under the new law, only the portion of software licenses sold to Washington state customers would be taxable – perhaps resulting in less than a million annually in royalty tax from the company.

The lead sponsor of HB3176 is Democratic Representative Ross Hunter, who represents Medina, home to Bill Gates and a number of current and former Microsoft billionaires and multi-millionaires, and other areas around Microsoft’s corporate campus.

For context, also see:

1. The Debate Is Back – Should Tax Returns Be Public? – NYTimes.com

What’s maddening is that the Department of Revenue won’t provide a complete explanation for why it won’t challenge this abusive tax transaction’s accounting. That’s what we’re hoping to learn more about with our records requests.

2. Tax break court case ups Wash. deficit to $2.8B

A court case that extended a tax break to out-of-state companies has nudged Washington’s budget deficit to about $2.8 billion, but early signs of an economic recovery are making the state’s financial future a bit brighter.

A debt of $2.8 billion, eh? Microsoft has dodged over a billion.

Microsoft is losing billions of dollars online at a pace of about $2,000,000,000 per year. All those tax breaks it may be receiving with the help of former employees inside the government is a subject we’ve warned about many times before. Just because a person leaves Microsoft does not mean s/he stops serving Microsoft. There is more information about it in [1, 2, 3, 4]. One source says that “Hunter represents Medina, which is also where Bill Gates lives.” That would be his former employer. What a small world and what an obvious conflict of interests.

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