Between 2008 and 2011, 26 major corporations were able to pay no federal corporate income tax, despite making a combined $205 billion in profits. According to a new report from Citizens for Tax Justice, Facebook joined that illustrious club last year, receiving $429 million in tax rebates despite making more than $1 billion in profits:
Earlier this month, the Facebook Inc. released its first “10-K” annual financial report since going public last year. Hidden in the report’s footnotes is an amazing admission: despite $1.1 billion in U.S. profits in 2012, Facebook did not pay even a dime in federal and state income taxes.
Instead, Facebook says it will receive net tax refunds totaling $429 million.
Facebook’s income tax refunds stem from the company’s use of a single tax break, the tax deductibility of executive stock options. That tax break reduced Facebook’s federal and state income taxes by $1,033 million in 2012, including refunds of earlier years’ taxes of $451 million
Facebook will be able to carry further tax rebates forward, according to CTJ, for a total of $3 billion in tax deductions.