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Sacramento, CA – A comprehensive new study from the Institute on Taxation and Economic Policy profiles the 265 consistently profitable Fortune 500 corporations and finds that 68 companies paid no state corporate income tax in at least one of the last three years and 20 of these corporations averaged a tax rate of zero or less during the 2008-2010 period.
“Thanks to their armies of accountants, paying taxes has become optional for some of the most profitable corporations in the world,” said Pedro Morillas, CALPIRG legislative director. “And that leaves small businesses and individual taxpayers to pick up the tab.”
The report, “Corporate Tax Dodging in Fifty States, 2008-2010” was produced by the Institute on Taxation and Economic Policy (ITEP) and released today in conjunction with CALPIRG. It examines Fortune 500 companies that filed SEC filings with required information on total state taxes paid that year. Only companies that reported profits all three years were included in the study. It includes Wells Fargo, PG&E and Chevron, which are headquartered in California.
“Our report shows these 265 corporations raked in a combined $1.33 trillion in profits in the last three years, and far too many have managed to shelter half or more of their profits from state taxes,” said Matthew Gardner, Executive Director at the Institute on Taxation and Economic Policy and the report’s co-author. “They’re so busy avoiding taxes, it’s no wonder they’re not creating any new jobs.”
The report finds that 68 of the 265 companies managed to pay no state income tax at all in at least one year from 2008 through 2010, despite telling their shareholders they made almost $117 billion in pretax U.S. profits in those no-tax years. Some companies, such as DuPont, Goodrich, International Paper and Intel, paid no net state income tax over the full three-year period.
CALPIRG own study last year on the use of offshore tax havens found that household tax filers in California pay on average $435 in additional federal taxes to make up for revenue lost due to use of offshore tax havens. That report, titled How Much Did Offshore Tax Havens Cost You in 2010 can be found at this link.
“At a minimum, we need to be able to follow the money,” concluded Morillas. “Most individual states are left in the dark when it comes to who is using up all their tax breaks and manipulating the system.”
Because California has no transparency regarding business taxes, it is not possible to determine specific tax amounts paid by corporations to individual this state. All figures in ITEP’s report “Corporate Tax Dodging in Fifty States, 2008-2010” are aggregate for taxes paid to all U.S. states by each corporation.
The new ITEP study is online at http://www.ctj.org/corporatetaxdodgers50states/
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CALPIRG, the California Public Interest Research Group is a non profit non partisan consumer and taxpayer protection organization that stands up to powerful interests on behalf of all Californians.
The Institute on Taxation and Economic Policy (ITEP) is a 501 (c)(3) non-profit, non-partisan research organization, founded in Washington, DC in 1980, whose mission is to inform policymakers and the public of the effects of current and proposed tax policies on tax fairness, government budgets, and sound economic policy.
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