The tech giant has said it snubbed the query regarding using its technology in police body cameras and cars.
Speaking at Stanford University this week, the company's president Brad Smith - who didn't name the law enforcement in question - explained that there were concerns the use of the facial recognition software would disproportionately affect minorities and women.
In the past, research has shown that with the technology being trained primarily on white and male face, other individuals carried a higher error rate.
Smith said: "Anytime they pulled anyone over, they wanted to run a face scan. We said this technology is not your answer."
Microsoft's stance - which includes calling for federal regulation in the US - comes after Amazon has faced a lot of criticism for selling such tech to law enforcement, while Google has refused to sell it altogether due to the potential for abuse.
Earlier this year, Smith wrote in an open letter: "Move fast and break things' became something of a mantra in Silicon Valley earlier this decade.
"But if we move too fast with facial recognition, we may find that people's fundamental rights are being broken."