Fri. Dec 13th, 2019

From Amazon to GM, here are all the major tech and transportation companies who paid $0 in federal income taxes last year

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From Amazon to GM, here are all the major tech and transportation companies who paid $0 in federal income taxes last year

  • These massive companies made millions — in some cases, billions — in profits in 2018, but didn’t pay a dime in federal income taxes.
  • Tax cuts passed by the Trump administration in 2017 have made it much easier for the big corporations like Amazon, IBM, and Netflix avoid paying income taxes.
  • Most of the companies on this list earned tax rebates larger than their income tax, effectively seeing a negative tax rate.
  • Visit Business Insider’s homepage for more stories.

In theory, the US imposes a 21% tax rate on corporations. In reality, the amount major corporations are paying is far lower.

Amazon, for example, earned over $10 billion in income in 2018. But by taking advantage of tax credits, the company zeroed out its income taxes and earned a rebate of $129 million, according to tax filings published by the Securities and Exchange Commission.

It has become much easier for massive corporations to avoid paying federal income tax in recent years. The 2017 Tax Cuts and Jobs Act, one of the most significant legislative achievements by Republicans and President Donald Trump since his election, opens new windows for tax rebates for major corporations.

The Institute on Taxation and Economic Policy, a nonprofit think tank, analyzed SEC filings of Fortune 500 companies and identified 60 major corporations that didn’t pay any federal income taxes in 2018. Of those, 11 do business in the tech or transportation industries.

“These tax loopholes allow many profitable corporations to avoid paying a single dime in taxes, but it should also be noted that many other profitable corporations are also using these special breaks to pay far less than the 21 percent statutory federal income tax rate,” Matthew Gardner, a lead author of the ITEP report, wrote.

Here are 11 massive tech and transportation companies that didn’t pay any federal income taxes last year — negative tax rates indicate that companies got more money back in rebates than they had to pay in taxes.

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Activision Blizzard

2018 US income: $447 million

Federal income tax after rebates: -$228 million

Effective federal income tax rate: -51%

In a statement to Business Insider, a spokesperson for Activision Blizzard emphasized that the company paid other taxes beyond the federal income tax, including state taxes, ultimately spending millions of dollars total on taxes.

“We did not receive a tax refund in the U.S. for 2018,” the spokesperson said.

Amazon

2018 US income: $10.8 billion

Federal tax after rebates: -$129 million

Effective tax rate: -1%

An Amazon spokesperson noted that Amazon paid billions in taxes other than the federal income taxes, including state and local taxes, and added that Amazon has brought its total US workforce to more than 250,000.

“Amazon pays all the taxes we are required to pay in the US and every country where we operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years,” the spokesperson said. “Corporate tax is based on profits, not revenues, and our profits remain modest given retail is a highly competitive, low-margin business and our continued heavy investment.”

Delta Airlines

2018 US income: $5 billion

Federal tax after rebates: -$187 million

Effective tax rate: -4%

A spokesperson for Delta did not immediately respond to a request for comment.

General Motors

2018 US income: $4.32 billion

Federal tax after rebates: -$104 million

Effective tax rate: -2%

A spokesperson for GM did not immediately respond to a request for comment.

Goodyear

2018 US income: $440 million

Federal tax after rebates: -$15 million

Effective tax rate: -3%

A spokesperson for Goodyear did not immediately respond to a request for comment.

IBM

2018 US income: $500 million

Federal tax after rebates: -$342 million

Effective tax rate: -68%

A spokesperson for IBM did not immediately respond to a request for comment.

JetBlue

2018 US income: $219 million

Federal tax after rebates: -$60 million

Effective tax rate: -27%

A spokesperson for JetBlue did not immediately respond to a request for comment.

Netflix

2018 US income: $856 million

Federal tax after rebates: -$22 million

Effective tax rate: -3%

A spokesperson for Netflix did not immediately respond to a request for comment.

Pitney Bowes

2018 US income: $125 million

Federal tax after rebates: -$50 million

Effective tax rate: -40%

In a statement to Business Insider, a spokesperson for Pitney Bowes emphasized that, while its federal income tax was zeroed out by rebates, the company still paid other taxes totaling approximately $127 million in 2016, $53 million in in 2017, and $26 million in 2018. The spokesperson added that the company’s taxes lowered following the sale of its production mail business last year.

Salesforce

2018 US income: $800 million

Federal tax after rebates: Not immediately available.*

*In its report, the Institute on Taxation and Economic Policy notes that some companies’ vague language in their 10-K annual financial filings makes it difficult to calculate the exact size of their rebates. ITEP notes that Salesforce disclosed $132 million in “tax credits,” but doesn’t go into more detail.

A spokesperson for Salesforce did not immediately respond to a request for comment.

Tech Data

2018 US income: $210 million

Federal tax after rebates: -$10 million

Effective tax rate: -5%

A spokesperson for Tech Data did not immediately respond to a request for comment.

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