Report: Major corporations dodge state income tax
Report: Major corporations dodge state income tax
States are losing billions of dollars to corporate tax avoidance, a new nonpartisan report shows.
The report from Citizens for Tax Justice (CTJ) and the Institute on Taxation and Economic Policy (ITEP) examined 265 Fortune 500 corporations that fully disclosed state and local taxes, finding that together, they paid state income taxes equal to 3 percent of their U.S. profits from 2008-2010. This compares to an average state corporate tax rate of about 6.2 percent.
“While the need for corporate tax reform in Iowa has already been made clear, this report shows how ingrained the notion has become among the nation’s most profitable corporations that they don’t need to contribute to public services,” said Peter Fisher, research director of the nonpartisan Iowa Policy Project and an author of reports on corporate tax issues for the Iowa Fiscal Partnership.
Among the report’s findings:
– 68 companies paid 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.
– The 265 companies in the study avoided a total of $42.7 billion in state corporate income taxes over the three years.
– Some companies, including E.I . Du Pont de Nemours & Co., Goodrich Corp. and Intel Corp., paid no net state income tax in the full three-year period.
The CTJ/ITEP report cites opportunities state by state where the corporate tax code could be tightened. One idea that has been proposed by Iowa’s last two governors, Tom Vilsack and Chet Culver, but has not reached a vote on the floor of the House or Senate, is to close tax loopholes with a device called “combined reporting.”
To view the report, go to www.ctj.org/corporatetaxdodgers50states/
States are losing billions of dollars to corporate tax avoidance, a new nonpartisan report shows.
The report from Citizens for Tax Justice (CTJ) and the Institute on Taxation and Economic Policy (ITEP) examined 265 Fortune 500 corporations that fully disclosed state and local taxes, finding that together, they paid state income taxes equal to 3 percent of their U.S. profits from 2008-2010. This compares to an average state corporate tax rate of about 6.2 percent.
“While the need for corporate tax reform in Iowa has already been made clear, this report shows how ingrained the notion has become among the nation’s most profitable corporations that they don’t need to contribute to public services,” said Peter Fisher, research director of the nonpartisan Iowa Policy Project and an author of reports on corporate tax issues for the Iowa Fiscal Partnership.
Among the report’s findings:
– 68 companies paid 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.
– The 265 companies in the study avoided a total of $42.7 billion in state corporate income taxes over the three years.
– Some companies, including E.I . Du Pont de Nemours & Co., Goodrich Corp. and Intel Corp., paid no net state income tax in the full three-year period.
The CTJ/ITEP report cites opportunities state by state where the corporate tax code could be tightened. One idea that has been proposed by Iowa’s last two governors, Tom Vilsack and Chet Culver, but has not reached a vote on the floor of the House or Senate, is to close tax loopholes with a device called “combined reporting.”
To view the report, go to www.ctj.org/corporatetaxdodgers50states/
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