Michael talks about how Wal-Mart has played the transfer pricing manipulation game to reduce its state income taxes. But this is small potatoes when compared to the Federal tax reduction game.
AB readers know that I have had lots of posts on this topic – often giving huge hat tips to Max Sawicky. Here I document the drop in Wal-Mart’s overall effective tax rate. Here I note how part of this play relates to how they source goods from China. As I note – none of this is rocket science so one has to wonder why the tax authorities are not doing a better job at enforcing arm’s length pricing under section 482.