Microsoft: Tax bills for Windows 8 gift tablets just a mistake

Microsoft: Tax bills for Windows 8 gift tablets just a mistake

Summary: If you're among those who received a free Samsung Windows 8 tablet from Microsoft at Build and have erroneously gotten a tax bill for it, Microsoft plans to make good on it.

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Some attendees of Microsoft's Build conference who received free Windows 8 developer tablets have been receiving an unwelcome surprise: 1099 forms indicating that they'll have to pay taxes on their 'gifts.'

Paying attendees of the Build conference in September received free customized Samsung tablets running the developer preview version of Windows 8. There were no indications at that time that those accepting the gifts would be required to pay taxes on them.

But according to a number of posts in an MSDN Forum on the developer preview, that's what has started happening, as of this week.

"I just got a 1099 from Microsoft that shows I earned $1250.00 in income and no withholding. I was assured repeatedly at the conference that Microsoft was paying the taxes on this. I just spoke to a CPA and they think I owe the taxes," said one poster.

Said another: "I was around 15th in line (for the tablet at Build) and was also told by the people handing out tax forms that Microsoft would be paying all taxes for the Tablets. Got my tax form and nothing was withheld. "

Microsoft officials told me on February 2 that there has been a mistake and one the company plans to right immediately.

"Microsoft’s intent is to cover the taxes for these tablets, and we’re looking into why some participants are getting these notifications," said a spokesperson today when I asked.

It sounds like this is more of a paperwork snafu than a bait-and-switch from what I can tell. Once Microsoft has an alias for those who've erroneously gotten 1099s, I'll update this post with it.

Update (February 3): From the aforementioned Microsoft spokesperson: "Those who have been impacted by this should email nikedist@microsoft.com and in the subject line indicate 'Tax Related Inquiry.'"

Update No. 2: I am hearing this email address isn't working. Checking with Microsoft on it. Hold off on sending for a bit.

Topics: Hardware, Banking, Government, Government US, Laptops, Microsoft, Mobility, Tablets, Windows

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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15 comments
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  • RE: Microsoft: Tax bills for Windows 8 gift tablets just a mistake

    I received my 1099 yesterday :-( It will be interesting to see how Microsoft 'fixes' the problem.
    Jeff Richardson
    • RE: Microsoft: Tax bills for Windows 8 gift tablets just a mistake

      @Jeff Richardson <br>I know nothing about USA tax law, but I am curious as to whether or not MS paying the tax is itself a gift?
      Wakemewhentrollsgone
      • RE: Microsoft: Tax bills for Windows 8 gift tablets just a mistake

        @Habiloso

        i don't believe that it is. I could be wrong.
        msalzberg
      • RE: Microsoft: Tax bills for Windows 8 gift tablets just a mistake

        @Habiloso
        yeah.,. that will trigger another 1099 on the tax payed by MS which causes another 1099 and so on.... causing an infinite loop making IRS rich.. :-P
        teeboy75
  • No is not. Legally you are supposed to pay taxes on gift ....

    ... that are more than $100.

    I know is not commonly applied .... but the tax rule has being there for a more than 20 years.
    wackoae
    • RE: Microsoft: Tax bills for Windows 8 gift tablets just a mistake

      @wackoae

      You are totally incorrect. A gift is NOT taxable income to the recipient, and nothing changed 20 years ago (or before or after that) that would make it taxable income.
      cdgoldin
  • I'm glad to read...

    ...that Microsoft is going to take care of it. I don't know too many companies that would actually do that. I guarantee Apple wouldn't, although I think Google probably would.
    GoodThings2Life
  • RE: Microsoft: Tax bills for Windows 8 gift tablets just a mistake

    Are you kiddng? Even if they said up front I had to, I would happily pay the tax on a free Windows 8 tablet....!
    jmegert
  • RE: Microsoft: Tax bills for Windows 8 gift tablets just a mistake

    You have to pay tax on your bribes now?

    The whole world's gone soft!!!!
    BrownieBoy
  • RE: Microsoft: Tax bills for Windows 8 gift tablets just a mistake

    $1250 for a Tablet when I can get a good laptop for $499? I have another reason not to upgrade now.
    Randalllind
    • RE: Microsoft: Tax bills for Windows 8 gift tablets just a mistake

      @Randalllind Boy, you got that right. WOW!! ;)
      T-Wrench
    • RE: Microsoft: Tax bills for Windows 8 gift tablets just a mistake

      @Randalllind of course this was a highly-specced prototype made in low (relatively) volumes, probably using technology that is not widely available yet. Of course it's going to cost a lot. If they were to put the same hardware into full production its price would immediately be slashed.
      mog0
  • RE: Microsoft: Tax bills for Windows 8 gift tablets just a mistake

    The tablet is now generally available and retails for $1100: http://www.samsung.com/us/computer/tablet-pcs/XE700T1A-A01US. Since the //build kit included the dock and wireless keyboard, $1250 seems about right.
    LoremIpsum
  • I emailed that address

    I haven't heard back. Anyone else have any luck?
    chrislarlar
  • RE: Microsoft: Tax bills for Windows 8 gift tablets just a mistake

    A week ago I got the same, canned answer that I've seen posted. I filed without listing the 1099 income. I'm assuming it will go to zero, especially since it wasn't *me* that got the tablet, but my employer... I better not get audited, is all I can say. That is a bill that will get forwarded to MS.
    still fiddlin