Microsoft's $1 Billion Tax Dodge? Blogger Claims It's So

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.