Software Tax Break In Clinton Budget

Microsoft Corp., Oracle Corp. and other big software companies would reap a $560 million tax break in Clinton’s proposed budget to help them in the world’s software market.

The Clinton administration and House and Senate members say the break on foreign sales of software fixes a problem in the tax code by giving software companies the same export tax benefits that record companies, filmmakers and truck and toothpaste manufacturers enjoy.

They also say it would spur job growth in the software industry, which employs more than 532,000 people, and the tax cut could wind up more than paying for itself.

“All that we propose in this legislation is fair treatment under existing law,” said Rep. Jennifer Dunn, R-Wash., a co-sponsor of the tax break.

The Clinton budget proposal, and a bill sponsored by Dunn and Rep. Robert Matsui, D-Calif., would allow software makers to exempt 15 percent of their income from export sales from federal taxes. The exemption would reduce federal tax revenues by $560 million over six years, according to White House budget estimates, although Republicans think the cost would be much lower.