California Appeals $94 Million Tax Refund Decision for Microsoft

The California Franchise Tax Board is asking the state’s tax tribunal to reconsider a preliminary decision giving Microsoft Corp. a $94 million income tax refund tied to its treatment of repatriated foreign earnings.

The decision from the Office of Tax Appeals overturns long-established rules for apportioning income between states, the FTB said in its Aug. 28 petition for rehearing. If the opinion stands, similarly situated multinational taxpayers would be allowed to attribute “huge proportions of domestically earned business income” to foreign jurisdictions, instead of apportioning the income to be taxed in states where they do business, the FTB said. ...