The good folks at TechFlash asked me to write a guest post on Microsoft's tax practices and encouraged me to step back from the legal analysis I wrote recently and offer an opinion on what I think would be best:
In 2005, Microsoft reversed course after first withdrawing support for Washington’s proposed anti-discrimination bill under a boycott threat by a local pastor. Under pressure from outraged employees, customers and national media coverage, Microsoft helped pass the bill and pledged support for future anti-discrimination legislation. Last month, Microsoft contributed $100,000 to support Referendum 71, Washington’s domestic partnership initiative. Chairman Bill Gates and CEO Steve Ballmer each gave $25,000 as well. Last night, with Microsoft’s help, Washington voters appear to have become the first state in the nation to affirm domestic partnership rights in an election.
Why would Microsoft spend $100,000 of shareholder profit on a controversial gay rights bill? Because it’s important for the company to keep key stakeholders happy and preserve its image as a good corporate citizen.
To protect this image, it's time for Microsoft to reverse course on its ongoing billon-dollar tax dodge in Washington state. The best outcome for all parties would be for Microsoft to negotiate a settlement of its back taxes with the Department of Revenue and agree to comply with state tax law going forward.
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