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More than 50 state-owned companies paid less than $ 0 in federal income tax in 2020. Joe Raedle / Getty Images
Thanks to coronavirus relief programs and Trump-era tax cuts, 55 of America’s largest companies, including names known as Nike, FedEx, and Salesforce, have paid no federal income taxes in 2020 despite billions of dollars in profits, according to a report released Friday by the Institute for Fiscal and Economic Policy (ITEP).
The report looked at publicly traded companies included in the Fortune 500 or S&P 500 Index. Collectively, the 55 companies made more than $ 40 billion in pre-tax revenue in the United States last year, according to their reports. financial state. They would have paid a total of $ 8.5 billion for the year if they had paid the statutory federal corporate tax rate of 21%.
Not only did these companies pay no income tax, but many of them also received generous tax rebates, resulting in high negative effective tax rates. In one extreme example, Illinois-based food processing company Treehouse Foods paid no tax on $ 8 million in U.S. profits in 2020 while receiving a $ 96 million rebate. The company’s effective tax rate for the year was -1,167.1%.
Even more troubling, 26 of 55 companies, including FedEx, Nike and Salesforce, have not paid federal income tax in the past three consecutive years since the Republican tax bill came into effect. Former President Donald Trump cut the standard corporate tax rate from 35% to 21%.
The CARES law also helped. The bill, passed last March, contained a “carryback” provision that allowed businesses to use losses in 2020, 2019 and 2018 to offset profits made in previous years, resulting in a rebate that cut their 2020 taxes, according to the ITEP report.
“This means that losses incurred in 2018, 2019 and 2020 can offset income taxed at the higher tax rate of 35% in effect before 2018,” the institute explained. “Taxing profits at a rate while allowing losses to produce savings at a higher rate is an invitation for businesses to play games, shifting profits and losses from year to year on paper.” to reduce their tax burden. ”
While the CARES Act was designed to help businesses and families overcome the economic impact of the COVID-19 pandemic, many companies that have benefited from it have actually seen their stock price and CEO compensation. soar in 2020 thanks to a booming stock market.
Notable businesses paying $ 0 or less federal income tax in 2020:
FedEx
2020 U.S. profit: $ 1.2 billion
Tax paid: $ 0
Tax refund: $ 230 million
2020 share price change: + 138%
CEO salary 2020: $ 11 million (30% less than in 2019)
Nike
2020 U.S. profit: $ 2.9 billion
Tax paid: $ 0
Tax refund: $ 109 million
2020 share price change: + 38%
CEO salary 2020: $ 53 million (up 278% from 2019)
Salesforce
2020 U.S. profit: $ 2.63 billion
Tax paid: $ 0
Tax refund: $ 12 million
2020 share price change: + 33%
CEO salary 2020: $ 26 million (9% less than in 2019)
HP
2020 U.S. profit: $ 861 million
Tax paid: $ 0
Tax refund: $ 24 million
2020 share price change: + 22%
CEO salary 2020: $ 12.5 million (73% more than in 2019)
Michaels
2020 U.S. profit: $ 322 million
Tax paid: $ 0
Tax refund: $ 11 million
2020 share price change: + 61%
CEO salary 2020: undisclosed ($ 12 million in 2019)
DTE energy
2020 U.S. profit: $ 1.5 billion
Tax paid: $ 0
Tax refund: $ 247 million
2020 share price change: -6%
CEO salary 2020: $ 11 million (up 29% from 2019)
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