The Wisconsin Department of Revenue is irritated with Walmart. They’ve just noticed that Walmart has been charging itself rent in a (successful) attempt to avoid paying taxes. Teehee!
From the Journal-Sentinel:
Wal-Mart Stores Inc. has avoided millions of dollars in state taxes by paying rent on 87 Wisconsin properties in a way that the state Department of Revenue calls an “abuse and distortion of income.”
As a result, state tax auditors say, Wal-Mart owes more than $17.7 million in back corporate income taxes, interest and penalties for 1998, 1999 and 2000. More could be due for later years.
Revenue Department lawyer Mark Zimmer argues that the world’s largest retailer is not paying its fair share of taxes that support public schools, local police and fire departments and the highways it uses to transport what it sells in Wisconsin.
As a result, Wal-Mart shifts the burden of paying for those services “to individuals and small businesses who are unable to set up such elaborate mechanisms,” Zimmer told the Tax Appeals Commission, which is considering the matter.
Walmart doesn’t deny that they’re shafting the cheeseheads, they say they’re just “taking advantage of an overlap of state and federal tax laws.”
“Anything Wal-Mart can do to lawfully lower its costs allows the company to pass it along through lower prices,” said company spokesman John Simley. “This is a lawful (tax) structure in Wisconsin.”
Time to change your tax laws, Wisconsin. Walmart is too clever for you.