Washington may soon be broke. So perhaps now is not the best time for Rep. Ross Hunter to suggest one of the state's richest companies get a tax break.
A new bill would give Microsoft an unexpected windfall, right when the state's hurting the most.
In 1997, Microsoft opened a small office in Reno, Nevada. Why? So they could avoid paying $100 million a year in software royalty taxes.
After 13 years, with penalties and interest, Microsoft's unpaid tab amounts to more than $1 billion. A good chunk of the current $2.8 billion that separates Washington from a balanced budget.
Ex-Redmondite Jeff Reifman is the Erin Brockovich of what he's dubbed Microsoft's Tax Dodge. And he says Hunter's proposed bill will only help his former company keep more of its cash.Hunter, a former candidate for King County Executive, represents Medina, home to Bill Gates. And Reifman says his bill would amount to a big wet kiss to his most famous constituent.
For one, it would slash Microsoft's taxable revenue. Shrinking the scope of a burden that used to be open to all sales worldwide by restricting taxes only to licenses sold within the state.
More importantly, Hunter's bill would close the loophole that Microsoft has abused for more than a decade. Directing the Department of Revenue to crack down on the kind of "abusive tax transaction" that Microsoft itself embodies with its tiny mailing address in Reno, a domestic version of Cayman Islands p.o. box.
As Reifman says, those opposed to Microsoft's tax dodge just want the company to "pay its due," rather than have politicians like Hunter bless its illegal practice "with amnesty at a critical juncture for our state's finances."