Montana seeking to close corporate tax loopholes
Slowly but surely, states are beginning to realize that corporate income tax can do a lot more good for their citizens if its actually remaining in the state, and not being funnelled through some loophole or tax-avoidance scheme. Montana is the next on the list to attack the problem, after state Sen. Ron Erickson introduced Senate Bill 36 yesterday, which “is aimed at stopping efforts by large corporations that have found complex ways by setting up foreign offices to avoid or lower the amount of taxes they pay in this country.”
How did this legislation come about? Why, Wal-Mart, of course. In fact, Erickson passed out copies of a 2007 Wall Street Journal article to the Senate Taxation Committee, an article that detailed how Wal-Mart had opened an office in Florence, Italy, specifically for the purpose of evading taxes. According to the Journal, Wal-Mart’s office in Italy was its only operating unit of a real estate subsidiary that controls billions of dollars of its property in U.S. states and was able to avoid U.S. taxes.
Erickson said he shops at a market in Missoula on southwest Higgins Avenue owned by a man named Jim Edwards, whose store competes against Wal-Mart. “Jim Edwards does not have a back pocket in Florence, Italy,” Erickson said. “If we want to be fair to the Jim Edwardses of Missoula, we have to make sure everyone’s paying their fair share.”
We’ve documented Wal-Mart’s state tax avoidance attempts before, and closing the loophole in Montana appears would save the state about $2.5 million per year. It doesn’t sound like a huge sum, but then again Montana’s budget isn’t going to compare to California or Illinois or New York anyway. As the Wall Street Journal noted then:
The Illinois Department of Revenue objected to the Italian tax maneuver, demanding $26.4 million in back taxes, interest and penalties. Wal-Mart paid the amount in dispute and then sued the state for a refund, according to a complaint filed in May in Illinois Circuit Court in Springfield.
The Illinois case is ongoing.
Missoula senator seeks to raise corporate taxes by closing loopholes [Missoulian]
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Posted by Corey Himrod on Friday, January 09 | 0 comments | Permalink
New lawsuit alleges Wal-Mart involvment in movie conspiracy
BUSTED!!!
Actually, as a recently joined member of Netflix, I have to admit I might not be impartial on this story. After all, they do deliver movies right to my door, allowing me to overcome my lifelong fear of video stores.
But that aside, the lawsuit appears to be some pretty serious stuff. From the Los Angeles Times:
The two companies agreed in 2005 that Wal-Mart, the world’s largest retailer, would close its online rental business and refer customers to Netflix, which would promote Wal-Mart’s DVD movie sales, according to the lawsuit filed in federal court in San Francisco.
Sounds like a case of a couple companies engaging in some “you scratch my back, I’ll scratch yours” behavior. The complaint suggests clandestine meetings, beginning with a dinner shared by Netflix CEO Reed Hastings and then-Wal-Mart.com CEO John Fleming in January 2005, in which discussions began as to how the two could reduce competition in the DVD sales and online DVD rental markets. You can check out the whole complaint here. Its like reading The Bourne Identity...if it was written by lawyers. Bland, legalese-loving lawyers. But seriously, it is pretty interesting, and at 24 pages its not tooooo long, so check it out.
Wal-Mart, Netflix sued over online video rentals [Reuters]
Wal-Mart, Netflix conspired to create monopoly, suit alleges [Bloomberg via Los Angeles Times]
Resnick v. Wal-Mart, Netflix (Complaint)
Posted by Corey Himrod on Wednesday, January 07 | 4 comments | Permalink
Wal-Mart rings in the new year by settling wage and hour lawsuits
Come holiday season, what do you get the company that seemingly has everything? How about a settlement to its seemingly endless chain of wage and overtime suits.
We ring in the new year with this news, that Wal-Mart has chosen to settle a massive number of wage/hour and overtime class actions. The terms of the settlement could eventually cost Wal-Mart up to $640 million to settle 63 of the nearly 80 such lawsuits out there. So why, after years of fighting these suits tooth and nail (winning some while others have ended in rather large judgments against the company), has Wal-Mart finally decided to settle? At least one law professor quoted in the Wall Street Journal has an idea:
Paul M. Secunda, an associate professor at Marquette University Law School, suggested Wal-Mart wanted to settle the lawsuits not just to avoid potentially more costly defeats in the courtroom, but to resolve issues that might be used to argue for passage of the Employee Free Choice Act. The legislation, expected to be considered by Congress next year, is fiercely opposed by Wal-Mart because the company worries it will make it easier for workers to unionize. Secunda said: “This is part of their overall strategy to get their labor house in order, and compared to what unionization might cost them, I think they probably realized it was a small price to pay.”
A small price to pay indeed. Wal-Mart has prevailed in getting class actions such as these decertified more times than the company has lost, though when it has and Wal-Mart has gone to trial, the judgments in just a handful of cases have totalled over $300 million. Settling 63 for just over $10 million each might not be so bad, especially if it earns the company some good street cred. Could a settlement in Dukes v. Wal-Mart be next??
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Posted by Corey Himrod on Monday, January 05 | 10 comments | Permalink
They are who we thought they were!
After a stinging loss to the Chicago Bears in 2006, coach Dennis Green flipped out at a post game press conference and uttered the now famous phrase “we are who we thought they were!” In other words, the Arizona Cardinals were prepared for the game and understood the other team’s flaws, but failed to capitalize on them. This quote reminds me of the many site fights around the country. Residents understand what Wal-Mart brings to the table before they get a store, yet are still surprised by some of the negative aspects after they get it. Despite what Wal-Mart says during the planning process, a supercenter will bring more traffic, more crime, and small business destruction.
Wal-Mart did not have an easy time building a supercenter in American Canyon. Finally, in late September 2007, a Wal-Mart supercenter opened, replacing another location in Vallejo, which had been open for 16 years. After one year of service at the new location, the supercenter is getting mixed reviews according to the Times-Herald. While Wal-Mart supporters and some local business leaders welcome the creation of good jobs and tax revenue, Wal-Mart critics feel the store
“...has hurt the area in the last year mostly by increasing already heavy traffic, and boosting crime.” Joel Feller, who also fought a Wal-Mart super store in Vallejo, goes on to say that “The store has had a profoundly negative impact on the regional economy for a couple hundred in sales tax revenues.”
To be fair, some residents are happy with the new Wal-Mart supercenter. They point to sales tax figures and the convenience of one-stop shopping; however, Wal-Mart’s growth is not without consequences. As Stacy Mitchell points out in her paper “Major Flaws Uncovered in Study Claiming Wal-Mart Has Not Harmed Small Business,” Wal-Mart will do more harm than good to a community in the long run. Also, don’t forget Wal-Mart’s use of subsidies and Medicaid as a way to drain funds from a local community.
For the latest story, see the Times-Herald:
Posted by Research Team on Monday, December 22 | 16 comments | Permalink
Discrimination the gift that keeps on giving at Wal-Mart
Life in the minority isn’t easy. When you’re in the minority and a recipient of threats and abuse because of your minority status, life gets even harder. But when you bring these issues and concerns for your own safety to the attention of your employer, and they do nothing, thats called the tipping point.
And so it was for Louay Kezy, a Michigan man who has filed a $12 million lawsuit against Wal-Mart after being on the receiving end of anti-Muslim and anti-Arab abuse at work. Kezy’s attorney, Nabih Ayad, relayed Kezy’s story to the Detroit News:
“They demeaned him, harassed him, called him names. They accused him of being a terrorist,” Ayad said. “Supervisors ordered him to do jobs that were unrelated to his duties. They allowed a joke, a game to continue where co-workers would toss a ball near him and pretend it was a grenade, a bomb. Wal-Mart allowed this hostile environment to continue and they fired him when he complained.”
Dearborn, Michigan, has a very large Arab and Muslim population, and with that in mind Wal-Mart opened an experimental store there in March which offers a special line of products geared toward the Arab American and American Muslim communities in the Metro Detroit area. Unfortunately, the same respect shown to customers may be missing with regards to employees.
“It is absurd that his supervisors think they can take this action against an Arab American without consequences right in the middle of the largest Arab community outside of the Middle East,” Ayad said. “That Wal-Mart can take their money as consumers but allow an Arab employee to be abused is absurd.”
This is a refrain we’ve heard all too often. Issues of discrimination within Wal-Mart seem to follow the company like paparazzi on Britney Spears.
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Posted by Corey Himrod on Friday, December 19 | 38 comments | Permalink
California lawmakers using wage and hour law to bargain with labor
We’ve covered Wal-Mart’s wage and hour (and overtime) issues many times over, culminating with last week’s $54 million settlement in Minnesota. We all get that Wal-Mart would prefer its employees work through breaks. And we certainly know that when it comes to paying employees for overtime, well, Wal-Mart would prefer that be optional.
California wage laws are, not surprisingly, fairly strict. And now, with that state facing a financial shortfall, the LA Times is reporting that business groups and GOP lawmakers are using wage and hour law as a bargaining chip in negotiations over how to fix a $14.8-billion hole in the state budget. The argument is that state laws like those in California - the ones mandating breaks for workers working at least 6 hours in succession, and requiring an employer to pay time-and-a-half once a worker has worked more than 8 hours in day - are expensive for employers to follow and force them to flee the state for friendlier confines. Places where breaks are voluntary [for the employer] and overtime exists only in a fantasy dreamland.
Not surprisingly, California Democrats and labor officials in the state disagree.
Employers’ latest efforts to tie both the meal break and overtime issue to contentious budget negotiations are aimed at reversing basic worker rights, said Art Pulaski, executive secretary-treasurer of the California Labor Federation.
“It’s about trying to help Wal-Mart and other big corporations get away from the long-established understanding that people should get a meal break at work” or be paid extra for extra hours, Pulasksi said.
“This has nothing to do with the budget or stimulating the economy,” said Barry Broad, a lobbyist for the International Brotherhood of Teamsters and other labor unions. “It doesn’t help the economy to lower 20 million people’s wages during a recession.”
It has been suggested that if state lawmakers can’t come to a consensus and close out these budget negotiations, a state government shutdown in the spring is a distinct possibility.
Overtime pay, rest breaks become bargaining chips in state budget crisis [LA Times]
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Posted by Corey Himrod on Monday, December 15 | 14 comments | Permalink
CALIFORNIA SITE FIGHT: WAL-MART TAKES STEP FORWARD IN LODI
Lodi gives Wal-Mart Supercenter the go-ahead [Sacramento Bee]
The Lodi City Council gave a green light early this morning to a proposal for a Wal-Mart Supercenter, voting to approve a revised environmental impact report on the project after a nearly seven-hour hearing.
The council voted 3-2 in support of the project, a move that overturned the Planning Commission’s rejection of it in October.
“Tonight is not the finish line,” Mayor Larry Hansen said shortly before voting to support the measure. He repeated his previous warnings that the matter likely would be challenged again, as it was in 2005, and end up in court.
“If I were Wal-Mart,” Hansen said, “I’d say what does it take to get our project dealt with the same way Lowe’s and Target and other projects are handled?”
The Planning Commission still must act on two related issues, including a use permit for the 216,710-square-foot Supercenter and the proposed 36-acre Lodi Shopping Center that would house it.
The vote followed nearly three hours of testimony from members of the public who were divided on the issue and nearly four hours of council discussion and presentations by leading opponents and advocates.
Also see: Lodi Wal-Mart battle stretches late into night [Stockton Record (Calif.)]
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Posted by Luke West on Thursday, December 11 | 0 comments | Permalink
CALIFORNIA SITE FIGHT: LOCAL GROCERS OPPOSE WAL-MART IN VENTURA
Union says Wal-Mart could hurt Ventura communities [Ventura County Reporter (Calif.)]
A union representing county grocers has stated that a Wal-Mart proposed for Victoria Avenue, in tandem with a weakened economy, will more than likely force the closure of a nearby supermarket if plans to usher in the giant retailer to Ventura follow through within the next year.
“The Vons on Telephone (Road and Victoria Avenue) would close,” says Martel Fraser, an officer with the United Food and Commercial Workers Union (UFCW) Local 1036 in Camarillo.
Having taken a staunch opposing stance against a Wal-Mart from coming in to Ventura — where the commercial giant would replace a former K-Mart — the UFCW also maintains that walkable community of senior citizens served by the placement of Vonsand other local stores in the area would suffer if the grocery store were to shut down.
There comments follow on the heels of a decision made last month by the Ventura City Council, which held off the adoption of an ordinance that would have passed down tight restrictions on big-box retailers that feature grocery departments.
Instead, the council opted to place the issue on the 2009 ballot; that vote will determine if Wal-Mart, which holds a long-term lease on the property, will be allowed to expand over 90,000 square feet, and if it can sell groceries once it moves in.
But groceries or no groceries, Fraser says the Vons at the Victoria/Telephone intersection, is vulnerable nonetheless, barely operating just above a 1 percent profit margin this year.
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Posted by Luke West on Thursday, December 11 | 0 comments | Permalink
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