California Affirms Microsoft’s Repatriation Tax Refund (Correct)

Microsoft is owed a $94 million California income tax refund tied to its treatment of repatriated earnings, the Office of Tax Appeals said in a ruling that could affect the tax liabilities of other multinational companies.

Two different panels of three administrative law judges rejected multiple arguments from the Franchise Tax Board that Microsoft can’t include $108.8 billion in gross foreign dividends from repatriation in calculating its taxable income in California compared to other states. The tax year at issue is 2018—the first year a new federal law was in effect that reduced the tax rate on overseas earning while ...