This post first appeared at The International Business Times.

Microsoft Corp. is currently sitting on almost $29.6 billion it would owe in US taxes if it repatriated the $92.9 billion of earnings it is keeping offshore, according to disclosures in the company’s most recent annual filings with the Securities and Exchange Commission. The amount of money that Microsoft is keeping offshore represents a significant spike from prior years, and the levies the company would owe amount to almost the entire two-year operating budget of the company’s home state of Washington.

The company says it has “not provided deferred US income taxes” because it says the earnings were generated from its “non-US subsidiaries” and then “reinvested outside the US.” Tax experts, however, say that details of the filing suggest the company is using tax shelters to dodge the taxes it owes as a company domiciled in the United States.

In response to a request for comment, a Microsoft spokesperson referred International Business Times to 2012 US Senate testimony from William J. Sample, the company’s corporate VP for worldwide tax. He said: “Microsoft’s tax results follow from its business, which is fundamentally a global business that requires us to operate in foreign markets in order to compete and grow. In conducting our business at home and abroad, we abide by US and foreign tax laws as written. That is not to say that the rules cannot be improved — to the contrary, we believe they can and should be.”

The disclosure in Microsoft’s SEC filing lands amid an intensifying debate over the fairness of US-based multinational corporations using offshore subsidiaries and so-called “inversions” to avoid paying American taxes. Such maneuvers — although often legal — threaten to signficantly reduce US corporate tax receipts during an era marked by government budget deficits.

White House officials have called the tactics an affront to “economic patriotism” and President Obama himself has derided “a small but growing group of big corporations that are fleeing the country to get out of paying taxes.” In a July speech, he said such firms are “declaring their base someplace else even though most of their operations are here.”

“I don’t care if it’s legal; it’s wrong,” Obama said. Meanwhile, Democratic lawmakers have been pushing legislation they say would discourage US companies from avoiding taxes through offshore subsidiaries. The proposals are being promoted in advance of the 2014 elections, as polling suggests the issue could be a winner for the party. In Illinois, the issue has already taken center stage in the state’s tightly contested gubernatorial campaign.

Because Microsoft has not declared itself a subsidiary of a foreign company, the firm has not technically engaged in an inversion. However, according to a 2012 US Senate investigation, the company has in recent years used its offshore subsidiaries to substantially reduce its tax bills.

That probe uncovered details of how those subsidiaries are used. In its report, the Senate’s Permanent Subcommittee on Investigations described what it called Microsoft’s “complex web of interrelated foreign entities to facilitate international sales and reduce US and foreign tax.” The panel’s report noted that “despite the [company’s] research largely occurring in the United States and generating US tax credits, profit rights to the intellectual property are largely located in foreign tax havens.” The report discovered that through those tax havens, “Microsoft was able to shift offshore nearly $21 billion (in a 3-year period), or almost half of its US retail sales net revenue, saving up to $4.5 billion in taxes on goods sold in the United States, or just over $4 million in US taxes each day.”

US Sen. Carl Levin, D-MI, said at the time: “Microsoft US avoids US taxes on 47 cents of each dollar of sales revenue it receives from selling its own products right here in this country. The product is developed here. It is sold here, to customers here. And yet Microsoft pays no taxes here on nearly half the income.”

Apple and General Electric, which also employ offshore subsidiaries, are the only US-based companies that have more money offshore than Microsoft, according to data compiled by Citizens for Tax Justice. In all, a May report by CTJ found that “American Fortune 500 corporations are likely saving about $550 billion by holding nearly $2 trillion of ‘permanently reinvested’ profits offshore.” The report also found that “28 these corporations reveal that they have paid an income tax rate of 10 percent or less to the governments of the countries where these profits are officially held, indicating that most of these profits are likely in offshore tax havens.”

Microsoft’s use of the offshore subsidiary tactics has exploded in the last five years, with the amount of Microsoft earnings shifted offshore jumping 516 percent since 2008, according to SEC filings.

According to Microsoft’s filings, if the company repatriates the $92.9 billion it is holding offshore, it would face a 31.9 percent US corporate tax rate. US law generally permits companies to deduct the foreign corporate taxes they’ve already paid from the US’s official 35 percent corporate tax rate. According to CTJ’s Richard Phillips, that means Microsoft’s disclosure implies the company is paying just 3.1 percent in the locales where it is currently holding the cash. Phillips says such an extremely low rate strongly suggests the firm is keeping the earnings not just in relatively low-tax locales like Ireland, Singapore and others the company has disclosed, but also in smaller countries like Bermuda that are considered true tax havens.

According to a Wall Street Journal report in 2012 about companies reducing transparency about their subsidiaries, Microsoft “once disclosed more than 100 subsidiaries [but] reported just 13 in its 2003 annual report and 11 in its 2012 report.”