Summary: $0 tax bill for Novell, thanks to an insane status quo

OVER the years Techrights has covered Novell fraud and Microsoft fraud, noting that there are a lot of factoids these companies want everyone to forget. Microsoft, for example, is borrowing money (looking to borrow even more when buying companies if not hijacking them) and it is not paying tax. The local press (near Novell) says that Novell dodges federal tax as well:

They are high-tech companies, financial players, and manufacturers. What they all have in common: They paid no federal income taxes last year, despite making millions of dollars in profits.

Software company Novell Inc. and cellphone tower giant American Tower Corp. are just two of 30 public companies in Massachusetts that owed no federal income tax in 2010, generally because they lost money in prior years and were able to carry forward those losses to offset tax liabilities. In some cases, companies received refunds worth millions of dollars.

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While the US corporate tax rate is 35 percent, that’s hardly the typical rate companies pay. For example, Novell last year had an effective tax rate of less than zero, according to its annual report filed with the Securities and Exchange Commission. The result: the Waltham company made a $378 million profit for the year and received a $9.1 million federal income tax refund, mainly thanks to tax losses carried forward on companies it had acquired.

Those who believe that corporations by their very existence are beneficial to the economy ought to rethink. As we are going to show later, Novell's lost staff is likely to be absorbed elsewhere, maybe even in a place that pays tax. ⬆