SINCE 1997, Microsoft has used a front office in Reno, Nevada to avoid paying Washington State over $528 million in software sales taxes.
During that time, the Vole booked $92 billion in profits and paid shareholders dividends of more than $42 billion, according to figures compiled by the online Puget Sound regional publication Crosscut. Yes, those are in billions, with a "b".
Microsoft's 35,510 employees in Washington state, mostly located in Redmond and Issaquah, build all of Microsoft's various software products -- Windows XP, Vista, Server in all its many variants, SQL Server, and the Microsoft Office Suite of products including Word, Excel, Powerpoint, and Access. The Vole's staff minions design, code, compile, test, build, debug, integrate, package, market, release, ship and provide support for all of Microsoft's software, all working within the state of Washington.
But Microsoft officially sells all of its software from a License and Operations office located in Reno, Nevada, where there are no software sales or corporate income taxes. Because Microsoft records its software sales revenue in Nevada, it avoids paying the Washington state business and occupation tax on software.
The writer at Crosscut has been following this story for ten years and believes it's unfair that Microsoft should be able to avoid paying relatively minimal taxes on its software products, and that Washington's legislators and officials allow it to do so. We agree with him. µ
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