A new report reveals that some American companies didn’t just pay no taxes last year — they paid negative taxes.
The top beneficiary — in terms of effective tax rate — was media company Gannett. While it only earned $7 million in income in 2018, it also earned tax credits of $11 million, netting a -164% effective tax rate. IBM has secured a number of subsidies over the years from state and local governments that ring to the tune of $1.4 billion.
IBM wasn’t the only one playing this game — which at the time was technically legal. Big blue-chips like Apple, Pfizer and Microsoft also stashed trillions offshore to pay higher corporate taxes domestically. Stock market darlings Amazon and Netflix also made a cameo, having paid no taxes in 2018. This isn’t the first year that these tech companies are enjoying tax breaks. In an earlier story, we reported that Amazon had also paid $0 in taxes in 2017 as well.
That means some of these companies getting these rebates sometimes are doing so because they have incurred heavy losses in previous years. Or companies could be utilizing accelerated depreciation — which was introduced as part of the new tax law. And those actions aren’t necessarily intended to deceive.