Roblox founder David Baszucki is accused of exploiting a tax relief that was formed for small businesses for years.
According to a The New York Times report, when David Baszucki founded the Roblox back in 2004, he also applied for the Qualified Small Business Stock (QSBS) and benefited from the tax relief ever since.
QSBS was created in 1993 to incentivize investors to invest in small businesses, easing the tax burden off of early investors. This stock was created to help kickstart small businesses, protecting the early investors from taxes on at least $10 million in profits. When we look at the current net worth of Roblox, which stands at approximately $60 billion, Baszucki and his family should have been able to exploit a loophole in QSBS at least 12 times.
As stated in The New York Times report, “Baszucki’s wife, four children, mother-in-law and even his first cousin-in-law” are among those that have avoided “millions of dollars” in taxes according to securities disclosure and statements of “people with knowledge”.
Of course, Roblox is not the only one to abuse the loophole for personal gains. Many other Silicon Valley firms were also benefiting from this tax break, including Airbnb, DoorDash, Uber, Zoom, Pinterest, and Lyft.
Roblox was one of eight mobile games to garner more than $1 billion in revenue in 2021. The company recently reported a 102 percent increase in revenue in Q3 FY2021, totaling $509 million.
Roblox took heat in December 2021 from YouTube channel People Make Games for “stock market-like collectibles” and a lack of safeguarding, allegedly the company does little to prevent the exploitation of its young audience.
