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Tax Dodger Microsoft Wants Linux to Pay Microsoft Tax for Storage Devices

Posted in America, Antitrust, Finance, Free/Libre Software, GNU/Linux, Interoperability, Kernel, Microsoft, Patents at 6:03 am by Dr. Roy Schestowitz

Assorted international currencies

Summary: More information about Microsoft’s tax dodging and its renewed push for competitors to pay for exFAT patents

ONE OF MICROSOFT’S FORMER members of staff has decided to blow the whistle — so to speak — and force the company to pay fees that it avoided paying for many years. We wrote about this in recent weeks [1, 2, 3, 4] not just because it demonstrates a pattern of fraud [1, 2, 3] but also because it shows Microsoft’s hypocrisy when it comes to liability and tax.

Here is the latest update from Jeff Reifman:

According to the Department of Revenue, 3,088 taxpayers (or SUCKERS! as Microsoft’s CEO Steve Ballmer might call them) paid B&O Royalty Tax in 2009.

Below is the history of B&O Royalty taxes paid in Washington since 1999 (source: Wa. Dept. of Revenue via e-mail). Note: I calculated the taxes paid column at .00484 of taxable revenue.

While $6.3 million in royalty taxes were paid in ’09, if Microsoft had been paying the tax on its $18.7 billion in licensing revenue – the state should have recorded more than $87.6 million in tax receipts.

This may explain why Ballmer has so far refused to respond to our call to open up Microsoft’s Washington and Nevada tax records.

Mary Jo Foley brings back memories of Tuxera [1, 2, 3, 4, 5], which helps Microsoft tax Linux users (using software patents).

Microsoft has been licensing its exFAT flash file format for licensing for a while now. In case you forgot, on December 10, the company reminded folks that exFAT is available for licensing.

exFAT, or EXtended File Allocation Table, is an enhanced version of the FAT file system from Microsoft that uses less overhead than the Windows NTFS file system. It extends the maximum file size of 4GB in FAT32 to virtually unlimited. exFAT is part of part of Windows CE and Windows client.

This is another wonderful example of Microsoft stifling interoperability and using proprietary means to extract money from its competition, by holding data hostage. TomTom found it out the hard way.

In light of all this, how can the US Department of Justice (already in Microsoft’s pocket [1, 2, 3, 4, 5, 6, 7, 8]) let Microsoft settle? Nothing has changed.

Microsoft has been working to meet the requirements of its antitrust settlement with the U.S. Department of Justice since the settlement was approved in 2002. A joint filing in the case this week indicates that process is “substantially complete,” according to the Seattle Post-Intelligencer.

The absurdities above can only ever endure when it is Microsoft and other large companies running the government rather than it being the other way around.

“Microsoft is pulling out every favor it’s got … It has a very close relationship with DOJ and the White House, and all of that pressure is being brought to bear.”

Knowledgeable tech industry source [via]

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  1. wallclimber said,

    December 11, 2009 at 2:10 pm


    “The absurdities above can only ever endure when it is Microsoft and other large companies running the government rather than it being the other way around.”

    If you really think about it, “the other way around” would be governments running the large companies, which is NOT (I hope!) what you’d really wish.

    It is difficult to see any benefit in either extreme. Personally, I’d wish for a better balance, with healthy competition being the goal. Maybe some day it will happen.

    Roy Schestowitz Reply:

    The problem I had in mind is one where oversight (like DOJ) has conflicting interests. The oversight should be independent.

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