Off-Shore Corporation Gets Nevada Taxation Contract

Accenture Makes Most Of Its Money From Outsourcing

by Johnny Gunn

In what could become a controversial situation, a contract to build a new computer program for the Nevada Taxation Department was given to Accenture, a Bermuda corporation with a New York address but no headquarters operation in the U.S. The initial part of the contract is for about $28 million and the taxation agency says it needs the new computer program because of changes in Nevada's tax law, in particular changes brought about by the $836 million tax increase from the last legislative session.

Accenture is a company with lots of history, and in today's market is considered among the largest technology services companies in the world. According to a report from CNETNews.com, the company is also being investigated by the U.S. Securities and Exchange Commission for "an incident of possible noncompliance with the Foreign Corrupt Practices Act and/or with Accenture's internal controls in connection with certain of Accenture's operations in the Middle East."

The Nevada Department of Taxation is looking for what they are calling a fully integrated and comprehensive unified tax system, and following extensive research feels Accenture is the best company to provide that. The contract was approved by Governor Kenny Guinn and Attorney General Brian Sandoval acting as the state Board of Examiners.

The Nevada Observer asked for comments from the two, but neither responded to the request.

Accenture has no official headquarters, by their own definition. They have a website: http://www.accenture.com and they are listed on the stock exchange under the ticker symbol ACN. Accenture started out in business as Andersen Consulting, a part of the Arthur Andersen Accounting Corporation, but broke away in 1999 and has grown to become one of the world's largest providers of IT services. Its second most income producing division is its outsourcing according to reports from the Hamilton, Bermuda company. Arthur Anderson you might remember is the accounting firm that allegedly helped Enron with devious accounting practices.

Fortune Magazine named Accenture One of America's Most Admired Companies for 2004. The company reported revenue of $11.8 billion in 2003 and has about 83,000 employees worldwide.

It's through its outsourcing flexibility that Accenture is able to be financially competitive in today's market according to analysts. In the current political campaign for president, outsourcing has become a major debating point, but economists have different takes on the matter.

According to sources within the Federal Reserve, the American economy eliminates roughly 15 million jobs each year, which would be about one in seven, and of those, outsourcing only represents between one hundred thousand and three hundred thousand jobs.

The inference from these figures is, according to the Fed, foreign competition accounts for only about one in fifty of all job losses in the country. It's been estimated that between service industries and manufacturing, about six hundred thousand jobs will move overseas by 2010.

The contract with Accenture will total more than $40 million, and the next legislature is expected to have to fund the difference between what was made available in 2003 and 2005. Taxation says the new system is expected to improve their tax management, even collection of money.