At Wednesday’s annual meeting of Google Inc. (NASDAQ: GOOG) shareholders, the Domini Social Equity Fund and several co-filers have submitted a proposal for consideration requesting that the company’s board of directors “adopt a set of principles to address the impact of Google’s tax strategies on society….” Supporters are quick to point out that the proposal is not a vote on tax reform or on how much tax Google should pay, but rather on what principles the company will use formulate its approach to taxes.
Like many other companies, including Apple Inc. (NASDAQ: AAPL), Google operates offshore subsidiaries in other countries that receive payments for goods and services and pay taxes at the foreign country’s rate rather than the usually much higher U.S. corporate tax rate. If Google or another company wants to bring that money back to the United States, it must either wait for a tax holiday or pay the U.S. tax.
eBay Inc. (NASDAQ: EBAY) repatriated net cash of $6 billion after paying about $3 billion in U.S. tax in the first quarter of this year. That sharp tax bite is usually only paid when the company has no other choice.
A consumer group called SumOfUs is also circulating an online petition seeking 150,000 signatures that it plans to present to Google’s management at the annual meeting. The group claims that Google owes $2 billion in taxes around the world.
Google stock traded up about 0.6% in the noon hour on Tuesday, at $533.04 in a 52-week split-adjusted range of $502.80 to $604.83.