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How HP, other Companies Use Overseas Money in the U.S.
Short-term loans between divisions of a company, done with care to follow IRS and auditing guidelines, is how U.S. companies can use cash stored overseas in their U.S. operations without having to pay taxes on it.
According to the Wall Street Journal, Hewlett-Packard Co. is among the companies who take short-term loans from overseas operations to access the cash without tax liabilities. The moves aren’t required to be disclosed, according to the report, so it is hard to follow them.
HP used the loans almost as much as the commercial paper market in 2011-2012 for operating expenses – it took $1.6 billion in short-term loans from its overseas divisions and borrowed $1.9 billion in the commercial paper market, according to the report that cites testimony in a 2012 Senate hearing. HP also disclosed that it used the loans during "all but 85 days of the 2011 and 2012 fiscal years," according to the report.
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