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Remember learning that G.E paid no income tax at all? Well, you ain't seen nuttin' yet. [View All]

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No Elephants Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-18-13 07:05 PM
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Remember learning that G.E paid no income tax at all? Well, you ain't seen nuttin' yet.
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Edited on Mon Feb-18-13 07:27 PM by No Elephants
Facebook pays no tax for 2012, gets $429 million refund

A legal corporate tax benefit flipped Facebook's liability into a refund, sparking online controversy over "corporate welfare."

Even though Facebook reported $1.1 billion in pre-tax profits from U.S. operations in 2012, it will probably pay zero federal and state taxes and even receive a federal tax refund of about $429 million according to a Feb. 14 statement from Citizens for Tax Justice.

The tax-research and lobbying organization calls the footnotes in Facebooks Jan. 30 financial statement an amazing admission, but theres nothing illegal about the corporate tax breaks the company is claiming. Companies are allowed to treat the cost of non-cash compensation, such as stock options, as an expense that reduces profits, just like salaries.

snip

Facebook says it had a $559 million federal tax liability in 2012, but that liability isnt a payment. In a footnote, the company also said that it had a $1.03 billion excess tax benefit last year related to stock option exercises and other equity awards. That benefit is what flips the federal tax liability into a refund, after a small percentage is applied to state taxes.

Citizens for Tax Justice says companies should treat stock options the same in their reports to shareholders as they do in their tax filings. According to its 2012 annual earnings report, Facebook said it paid some "income and other employment taxes," and paid $2.86 billion to "the appropriate tax authorities. Nonetheless, the Citizens for Tax Justice report led to online backlash against the social network.


Read more: http://www.upi.com/blog/2013/02/18/Facebook-pays-no-tax...


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