"Seattle-based technologist, writer, and media activist" Jeff Reifman has an interesting post up about how Microsoft claims all of its licensing revenue in Nevada, thus avoiding paying nearly $1 billion in Washington taxes, according to Reifman's calculations.

For tax purposes, Microsoft reports that it’s earned its estimated $143 billion in software licensing revenue in Nevada, where there is no licensing tax. However, for legal purposes, Microsoft executes its licensing contracts so they are governed by and rely on the protections of Washington law and its courts (some regional contracts are governed by the laws in Ireland or China).

When necessary, as in the case Microsoft Licensing GP v. TSR Silicon Resources, which lasted two years, Microsoft uses the resources of Washington courts to enforce its licensing contracts. It does this while simultaneously dodging the taxes it would normally pay for engaging in the software licensing business in Washington - the same taxes that fund the courts.

Reifman's analysis continues, hitting on things like The doctrine of Nexus, The Step Doctrine, and Alter Ego Theory, which are all a bit over my head and frankly sound like Scientology terms.

Any Slog legal eagles out there care to comment? Is this legit? Because from what I understand, Washington could really use a billion dollars right about now.