For decades, profitable Fortune 500 companies have manipulated the tax system to avoid paying even a dime in tax on billions of dollars in U.S. profits. This ITEP report provides the first comprehensive look at how corporate tax changes under the 2017 Tax Cuts and Jobs Act affect the scale of corporate tax avoidance. The report finds that in 2018, 60 of America’s biggest corporations zeroed out their federal income taxes on $79 billion in U.S. pretax income. Instead of paying $16.4 billion in taxes at the 21 percent statutory corporate tax rate, these companies enjoyed a net corporate tax rebate of $4.3 billion.
Companies Represent Diverse Economic Sectors
The companies avoiding income taxes in 2018 represent a range of segments of the U.S. economy:
- Computer maker International Business Machines (IBM) earned $500 million in U.S. income and received a federal income tax rebate of $342 million.
- The retail giant Amazon reported $11 billion of U.S. income and claimed a federal income tax rebate of $129 million.
- The streaming service Netflix paid no federal income tax on $856 million of U.S. income.
- Beer maker Molson Coors enjoyed $1.3 billion of U.S. income in 2018 and received a federal income tax rebate of $22.9 million.
- Automaker General Motors reported a negative tax rate on $4.3 billion of income.
All 60 companies’ effective federal income tax rates for 2018 are shown in the table below.