$3.1 million tax lien filed against Google for non-payments of Michigan Business Tax
Google's move to Ann Arbor has been widely trumpeted as a sign high tech companies feel comfortable locating office in Southeast Michigan. However, the search engine has only hired approximately 300 of a promised 1,000 local employees.
Angela J. Cesere | AnnArbor.com file photo
“Because they don’t own property in the state, the lien could not be placed against an office here,” Ingham County Register of Deeds Curtis Hertel said.
“The lien can only be placed on property, so it wouldn’t make sense to place a lien on the building if they are only renting. All liens on out-of-state corporations that do not own property in Michigan are filed through Ingham County.”
Google leases space at 201 S. Division St., in Ann Arbor, where the company operates a sales office that employs more than 300 people. Google expanded into downtown Ann Arbor in 2006, thanks in part to a MEGA tax credit from the Michigan Economic Development Corporation.
AnnArbor.com tried to speak with Google and MEDC, but they were not able to be reached for comment.
The tax credit was worth up to $38.5 million during a 20-year period, and was predicated on Google’s promise to add 1,000 jobs to the Ann Arbor area.
In 2010, a state audit found that the Michigan Strategic Fund, which was in charge of administering the tax breaks, had been negligent in ensuring that all taxpayers qualified for the credits they were receiving. However, a subsequent audit released in April of 2011 said the irregularities had been remedied.
It is unclear whether the current lien is in relation to the tax breaks received from the state and state treasury spokesperson Terry Stanton said the treasury does not comment on particular liens.
“Liens are placed to ensure that the department is in line to recover what it believes it should be recovered,” he said.
Hertel said he had no knowledge of why the lien was placed but that placing a lien on a person or company’s property usually is not the state’s first choice for recovering taxes.
“They usually try to get payment in several ways before it comes to this,” he said.
“A lien is against property, but the state can’t put a lien on out of state property. Either way it goes on the company’s credit report. I’m not sure what a $3.1 million lien would mean to a company as big as Google but it will be on there.”
Ann Arbor city treasurer Matthew Horning said he had not heard of the lien on Google before Tuesday.
Ben Freed covers business for AnnArbor.com. You can sign up here to receive Business Review updates every week. Reach out to Ben at 734-623-2528 or email him at benfreed@annarbor.com. Follow him on twitter @BFreedinA2
Comments
Frank Lee
Thu, Mar 21, 2013 : 1:01 p.m.
"Google Inc. is appealing a $3.1 million tax lien filed against the Internet search company by the Michigan Treasury Department. The Lansing State Journal and the Detroit Free Press report Google says the lien stems from an issue related to the Mountain View, Calif.-based company's 2008 and 2009 corporate tax returns. Google has an advertising sales office in Ann Arbor and an auto ad sales team in Birmingham. The lien includes business tax assessments for $1.7 million and $1.4 million. The Michigan Economic Development Corp. says the lien has nothing to do with the $38 million tax break package awarded to Google in 2006." Read more: http://www.wxyz.com/dpp/money/business_news/Google-appealing-31M-tax-lien-filed-by-Michigan#ixzz2OB929Rje
a2grateful
Wed, Mar 20, 2013 : 7:53 p.m.
Do no evil Pay no taxes Hire no employees Answer no phones Make no comment Have no friends on a2.com Goondoggle
uptodate
Wed, Mar 20, 2013 : 5:53 p.m.
If that is a recent picture, please send an OSHA investigator over immediately, before the "worker" falls to his death. I do not see a safety harness.
bunicula
Wed, Mar 20, 2013 : 3:37 p.m.
they are saving the money to expand to N Korea...
noyfb
Wed, Mar 20, 2013 : 3:13 p.m.
Somebody email Milton Friedman and remind him how benevolent and good corporations are for society. Or better yet, email Rick Snyder and remind him how less corporate oversight is good for the economy! hahaha!!
Dcam
Wed, Mar 20, 2013 : 4:49 p.m.
Milton Friedman's secretary says Dr. Friedman isn't taking emails, he's offline.
dsponini
Wed, Mar 20, 2013 : 2:47 p.m.
Just Bing and be done!
PhillyCheeseSteak
Wed, Mar 20, 2013 : 2:30 p.m.
"AnnArbor.com tried to speak with Google and MEDC, but they were not able to be reached for comment." I'm not surprised. I'm a small business owner and I use Google Adwords, however, I can't reach them by phone either. Google has very poor customer service, by email only, which directs me to user forums. When you are having a problem or technical issue, sometimes you just want to talk to human by phone, which is not asking a lot from a company that you pay good money too.
Tom Joad
Wed, Mar 20, 2013 : 2:18 p.m.
Google's hometown Mountain View, CA has free community wifi provided by Google...where's our free wifi?
A2comments
Wed, Mar 20, 2013 : 2:14 p.m.
Since the article clearly states that whether this is related to the tax credits that they were promised (but didn't get last I read) is unknown, assuming the state is asking for those credits back would be an incorrect assumption. There is nothing said about any connection. I'm glad the state is pursuing Google to pay what they feel they are owed. "Do No Harm" has turned into "Yeah, Like I Care What You Think".
Nicholas Urfe
Wed, Mar 20, 2013 : 12:57 p.m.
I thought we were told these tax credits were a yearly thing, and they would only get them if the number of employees was added? I foolishly imagined it sort of like the "number of dependents" box on your taxes - either you meet it, or you don't. What about Proquest? They have promised vast numbers of jobs for similar, or large credits. The last news from them was layoffs.
Dirty Mouth
Wed, Mar 20, 2013 : 12:32 p.m.
Michigan taxes. Oh, yeah?
C'est la vie
Wed, Mar 20, 2013 : 12:28 p.m.
Not surprising. I was just reading yesterday about Google's tax shenanigans: Google: A master at the "Double Irish" revenue shift to Bermuda tax havens, while using tax loopholes to bring a lot of the money back to the U.S. without paying taxes on it. Recognized as one of the world's biggest tax avoiders. http://www.alternet.org/corporate-accountability-and-workplace/16-giant-corporations-have-basically-stopped-paying-taxes
HB11
Wed, Mar 20, 2013 : 12:01 p.m.
Maybe I am dense, but the 2nd last paragraph states: "A lien is against property, but the state can't put a lien on out of state property." However, in the first paragraph it states: "lien,...was filed in Ingham County against the search engine company's California-based headquarters" So if the state can not put a lien on out of state property, how was the lien placed? The statements seem to contradict each other. @Ben Freed, could you clarify? Thanks.
you can't handle the truth
Wed, Mar 20, 2013 : 11:45 a.m.
Granholm sure got a lot of mileage bragging about those 1,000 jobs that were coming. What a scam that was. "And in 5 years, you'll be blown away!"
meddler76
Wed, Mar 20, 2013 : 11:24 a.m.
More to come on this I am sure.
Ken
Wed, Mar 20, 2013 : 11:16 a.m.
What else should you expect from a firm and management that has Obama counted as one of Google's best friends?
clownfish
Wed, Mar 20, 2013 : 1:12 p.m.
profits and high stock price? Jan 22, 2013 – Search giant hits $50 billion revenue milestone for fourth quarter, a gain of 36 percent from previous year.
bobslowson
Wed, Mar 20, 2013 : 12:27 p.m.
Nice try at blaming the President. Get over it, your guy lost!
Craig Lounsbury
Wed, Mar 20, 2013 : 11:36 a.m.
I can assure you that corporations being delinquent in taxes is not just a democrat thing.
Alan Goldsmith
Wed, Mar 20, 2013 : 10:14 a.m.
"Google leases space at 201 S. Division St., in Ann Arbor, where the company operates a sales office that employs more than 300 people." How was this number verified, other than a PR flack talking to a reporter?
Tesla
Wed, Mar 20, 2013 : 5:12 a.m.
Michigan's not the only ones they owe back taxes too. France says they owe them 250 million. I googled. :)
Craig Lounsbury
Wed, Mar 20, 2013 : 11:26 a.m.
at this rate we may all be binging it pretty soon.
Kai Petainen
Wed, Mar 20, 2013 : 3:47 a.m.
although they are a big company, companies aren't that big to not notice $3 million. it would be fascinating to know who (if anyone) advised them about not paying it.
Kai Petainen
Wed, Mar 20, 2013 : 3:13 a.m.
fascinating article. thanks for writing about this.
PineyWoodsGuy
Wed, Mar 20, 2013 : 3 a.m.
I gave consideration to posting a comment about this news item. But, on second thought, I became concerned that Google would track me thru my ISP and fry my computer. So count me as Neutral on this news item.
rm1
Wed, Mar 20, 2013 : 2:28 a.m.
Google's public financials show about $48 Billion in cash at 12/31. At today's close, its market value was about $267 Billion. Whatever is going on, it's not that Google is unable to pay. I don't know what's going on, and neither do other commenters here. I am somewhat more reticent than some commenters to speculate, although among the range of possibilities is that there has been some miscommunication involving the tax authorities. I do hope the tax folks didn't file this just to show their toughness, or to show off that they are not intimidated by one of the largest companies in the world.
MD from ChiTown
Wed, Mar 20, 2013 : 11:59 a.m.
This is not about the ability to pay. It is about them receiving a tax credit and not complying with the requirements. Someone at the Big 4 firm that does there audit and tax returns should have advised them as to what they needed to do to be in compliance. It's called Due Diligence!!
pseudo
Wed, Mar 20, 2013 : 1:58 a.m.
my experience with both this state's tax code and the idiots that enforce it, tells me that possibly someone didn't communicate with Google too well about what was owed -v- or not. I am skeptical of both the claim of back taxes and the filing of the lien. given that, I hope Ben follows this story beyond this headline. it would be a question of mine as to how effective the state has been at collecting such taxes and/or asserting such deliquency specifically when companies are large enough to defend themselves, as google is.
Rick Stevens
Wed, Mar 20, 2013 : 1:52 a.m.
Google, the successor to Pfizer... MEDC and SPARK - crony capitalism in action.
Ken
Wed, Mar 20, 2013 : 12:48 p.m.
A tax abatement, which is nothing but corporate welfare, is a folly governments never seem to learn their lesson.
Kafkaland
Wed, Mar 20, 2013 : 1:01 a.m.
I wonder if Google is too big to forclose on to collect the lien?
a2grateful
Wed, Mar 20, 2013 : 12:52 a.m.
Some believe that earning retention, regardless of outstanding debt, creates wealth. Others call this stealing. Google + boondoggle = Goondoggle?
Tim Hornton
Wed, Mar 20, 2013 : 12:42 a.m.
There is no greater sin in a super lib town like Ann Arbor then to not pay your "fair" share of taxes. Crazy thing is Detroit is actually more liberal then Ann Arbor and hardly anyone pays their "fair" share of taxes in that city; also known as the worst city in America but most of the national rankings.
timjbd
Thu, Mar 21, 2013 : 2:35 p.m.
What do you mean by, "Detroit is actually more liberal than Ann Arbor?" Based on what?
GetRealA2
Wed, Mar 20, 2013 : 12:04 a.m.
Google: Geez, I guess we weren't connected! We implemented a comprehensive internet search and found that a company called, "Hieftje, Left, & Co." were supposed to pay this bill!! Not to worry Google, it'll be tied up in City Council long after you vacate the premises and move to more fertile grounds.
MD from ChiTown
Wed, Mar 20, 2013 : 11:22 a.m.
Like Texas
Jay Thomas
Tue, Mar 19, 2013 : 11:46 p.m.
While I'm glad they are here, it is important to note that they are making record profits and a stock price to match. If only the Obama supporting billionaires who founded google believed in actually paying their "fair share" (instead of just posing for pictures with this President) the rest of us might not have to pay so much. (note: same thing w/ Jeff Immelt of zero tax GE and Warren "I owe ten years of back taxes" Buffet)
clownfish
Wed, Mar 20, 2013 : 1:07 p.m.
What I don't get is how, under Obama, a business can be making record profits? I thought he was bad for business? this is shown clearly in the flatline in the DOW...
leaguebus
Wed, Mar 20, 2013 : 5:18 a.m.
The oil companies with their giant tax subsidies are Democrats too? Your revisionist history is quite amazing, calling the Democrats the party of big business is joke, right?
Joe Hood
Wed, Mar 20, 2013 : 12:22 a.m.
I think that is the difference between a good Democrat and a bad Democrat. Good is one that pays taxes.
Vivienne Armentrout
Tue, Mar 19, 2013 : 11:39 p.m.
You don't have a mention of the free parking that the City of Ann Arbor City Council also made available to Google - by reassigning General Fund money to a special fund. That Economic Development Fund has since been reabsorbed, I think. Here is my original post, with some updates (not current to the present moment). http://localannarbor.wordpress.com/2009/05/28/google-parking-and-the-wealth-of-the-city/
motorcycleminer
Wed, Mar 20, 2013 : 10:09 a.m.
Yet another great Ann Arbor boondoggle..thank you O great and visonary leaders....right
Tom Whitaker
Wed, Mar 20, 2013 : 2:06 a.m.
Actually, I believe there was a surplus because Google didn't hire all the people they promised to hire, so they didn't need all the parking spaces. The Economic Development Fund surplus was then put into the Fuller Road Station effort so that the Mayor could pronounce that "no general fund money was being used for the train station."
RUKiddingMe
Tue, Mar 19, 2013 : 11:22 p.m.
"I'm not sure what a $3.1 million lien would mean to a company as big as Google but it will be on there." ...so that's it? Kind of just shrug and say "well, THAT didn't work out, on to the next sweet deal for some empty promises from a business." I mean, seriously. Why doesn't SPARK get in the action and try and get some of that money back for the...oh wait, right; SPARK doesn't really do much except collect tax money the PEOPLE give them, not businesses. Everyone (council included) should remember things like this. When the next "golden" opportunity comes up and everyone gets all starry-eyed about our glorious shining future (e.g. new train station, new business, new [insert grand assumptions and poorly-thought out grand scheme by city leaders]), we should all think about the times it actually panned out to not at ALL be like what they said.
Michigan Man
Tue, Mar 19, 2013 : 11:14 p.m.
Must be a bunch of deadbeat GOP types?
EyeHeartA2
Wed, Mar 20, 2013 : 10:18 p.m.
I'm sorry clownboy, I can't follow all the double negatives in your post, so I didn't bother beyond the first paragraph. ... but here's a little clue for you: Most rant's that start with "Only", "Always" etc., are wrong. You would think you might have picked up on that by now.
clownfish
Wed, Mar 20, 2013 : 1:03 p.m.
I like this one, an entire state GOP: WV-01: David McKinley: Under David McKinley's leadership, the West Virginia Republican Party failed to pay its taxes. The IRS had to chase McKinley's party down for evading taxes and even seized the party's bank accounts. The Party ran up tens of thousands of dollars of debt to rent office space from McKinley's architecture and engineering firm. The IRS had to chase McKinley's party down for evading taxes, seized the party's bank account and demanded it pay back taxes and fines.
clownfish
Wed, Mar 20, 2013 : 1:02 p.m.
Not paying taxes is a bi-partisan problem. But, only the GOP whines about not enough people not paying income taxes. (after Reagan and Bush lowered the number of people that pay income tax) -APril 15, 2011, As Americans file their taxes in advance of Tax Day, at least 17 House Republicans have current or past tax problems, public records and news reports show. While Republicans lecture Americans about fiscal responsibility, reducing the deficit, and balancing the budget, some of these same House Republicans have failed to fulfill their personal responsibility: paying their taxes Here are some of the Great Whiners of our day: FL-22:Allen West: The IRS filed an $11,000 lien against West for back taxes. Three liens were placed on his home for unpaid bills IA-05: Steve King-May have improperly taken a tax credit on his DC home. IL-08: Joe Walsh: "Starting in 1992, Walsh was handed several liens for failing to pay state and federal income taxes, together totaling nearly $25,000, according to records from the Cook County Recorder of Deeds. The first lien, in June 1992, was for failing to pay $2,239 in federal income taxes. In June 1994, Walsh was handed a lien for failing to pay $21,566 in federal income taxes, some going as far back as 1985. Six months later, the state placed another lien for Walsh's failure to pay $778 in state income taxes. IN-09: Todd Young: While Todd Young rails against Washington's inability to control government spending and get its fiscal house in order, he has repeatedly paid his property taxes late on his property in Bloomington, Indiana. Since 2007, Young has accumulated $2,149.91 in delinquent property taxes and penalties.
EyeHeartA2
Wed, Mar 20, 2013 : 10:43 a.m.
...well then there's two right there I guess, so that proves your point. Good one. Really got me.
McGiver
Wed, Mar 20, 2013 : 10:10 a.m.
Like Timothy Geitner ? And Warren Buffit?
EyeHeartA2
Wed, Mar 20, 2013 : 3:25 a.m.
More of a Dem attitude: Everybody should pay taxes but me.
Joe Hood
Wed, Mar 20, 2013 : 12:23 a.m.
Deadbeats perhaps but certainly not GOP.
EyeHeartA2
Tue, Mar 19, 2013 : 11:11 p.m.
....but, but, they are SUCH a cool company. And I just LOVE those high tech companies. So much better than those lousy manufacturing jobs. and where are all the moooooovie stars? I just loooooved seeing them at Zingermans.
shepard145
Tue, Mar 19, 2013 : 10:46 p.m.
...Step one: paint the building. Step two: Install the sign.
pseudo
Wed, Mar 20, 2013 : 2 a.m.
well, except for the part where the company pays to install the sign in 2006 and the building, owned by another company, is scheduled for painting in 2012 (or whenever it was).
The Picker
Tue, Mar 19, 2013 : 11:57 p.m.
Duh !
Brad
Tue, Mar 19, 2013 : 10:37 p.m.
The "Midtown Deadbeats"?
Jack Gladney
Tue, Mar 19, 2013 : 10:34 p.m.
"Pay No Taxes"
GoNavy
Tue, Mar 19, 2013 : 10:25 p.m.
"Do no evil."
Alan Goldsmith
Tue, Mar 19, 2013 : 10:24 p.m.
"Google expanded into downtown Ann Arbor in 2006, thanks in part to a MEGA tax credit from the Michigan Economic Development Corporation." So remind us again of the incentives the City of Ann Arbor gave Google to move here? You remember, when City services were being cut like fire fighters and police employees? You remember, the one the Mayor took credit for? Any comments from local Ann Arbor political leaders or are they all home hiding under their beds? Maybe it should have set off alarms when the refused to release how many actual jobs they created?
timjbd
Thu, Mar 21, 2013 : 2:31 p.m.
Goes along with the fantasy, supported by this cheerleading organ (A2.com), of Ann Arbor SPARK creating 12,000 jobs when the actual number was 70. Snyder got himself elected on that lie.
YpsiGirl4Ever
Wed, Mar 20, 2013 : 6:24 a.m.
Did Google get FREE PARKING from the City of A2 for like two or three years? And I heard at best, they "created" 750 jobs with most of them being temporary in nature.
Homeland Conspiracy
Tue, Mar 19, 2013 : 10:23 p.m.
Why didn't they paint BEFORE they put up the sign
dancinginmysoul
Wed, Mar 20, 2013 : 2:49 p.m.
To paint it before the sign went up would have been way to cost efficient. We do need an edit button! And a delete this post option (of one's own posts).
Homeland Conspiracy
Wed, Mar 20, 2013 : 1:31 p.m.
*posted......................come on A2.com we need an EDIT button!
Homeland Conspiracy
Wed, Mar 20, 2013 : 1:30 p.m.
@The picker I think you are wrong. The picture is not of a repaint. I remember thinking the same thing I post when I saw them painting when Google 1st moved in. And yes I am a painter so I tend to notice things like that.
Gorc
Wed, Mar 20, 2013 : 11:47 a.m.
That's a question for McKinnely properties...they own the building.
The Picker
Tue, Mar 19, 2013 : 11:55 p.m.
It's being re-painted ! Duh !
dancinginmysoul
Tue, Mar 19, 2013 : 10:22 p.m.
Does anyone know why they haven't made good on the hiring promise?
dancinginmysoul
Wed, Mar 20, 2013 : 2:48 p.m.
@Ypsi: isn't that what I said? @clownfish: touche.
clownfish
Wed, Mar 20, 2013 : 12:54 p.m.
Because it was all fantasy numbers to get a tax credit?
YpsiGirl4Ever
Wed, Mar 20, 2013 : 6:22 a.m.
They have not!
DonBee
Tue, Mar 19, 2013 : 10:19 p.m.
We give them tax credits, they promise a certain number of "good" jobs. They gave us a sales call center and skipped paying the taxes. This from the company who started with the principle of "Do No Evil"
PhillyCheeseSteak
Wed, Mar 20, 2013 : 2:20 p.m.
DonBee - it's not even a sales call center. As a small business person who uses GoogleAdwords, it find it extremely frustrating that there is NO phone support - only email instructions on how to get help from one of their forums.
beardown
Wed, Mar 20, 2013 : 12:34 a.m.
Started with that principle. That's not their guiding philosophy anymore. Now it's kill me all and let the lawyers sort it out.
Stewart G. Griffin
Tue, Mar 19, 2013 : 10:09 p.m.
Sounds to me that the boys over in accounting should have Googled "State of Michigan business tax requirements" just for the hell of it.
bamboozled
Wed, Mar 20, 2013 : 3:35 p.m.
Damnit... I couldn't help but hear Stewie's voice saying this.
MD from ChiTown
Wed, Mar 20, 2013 : 11:43 a.m.
Yeah, and that tax credits are frequently subject to audit. Especially when they are in the millions of dollars.
justcurious
Tue, Mar 19, 2013 : 10:04 p.m.
Well isn't that just peachy? I guess they couldn't afford to pay.