A report from the Institute on Taxation and Economic Policy found that 91 Fortune 500 companies had a 0% income tax rate in 2018.
The report covers the first year since President Donald Trump signed the Tax Cuts and Jobs Act — which was signed in December 2017. It covered 379 profitable Fortune 500 companies from 2018.
Of the 379 companies the report looked at, 195 of them had a federal income tax rate of less than 10.5% — that’s 51% of the companies examined with an average tax rate of 2%. The average tax rate of all 379 companies was 11%.
Among those companies paying 0% taxes were Amazon.com Inc. (Nasdaq: AMZN), Gannett Co. Inc. (NYSE: GCI), Duke Energy (NYSE: DUK), Netflix Inc. (Nasdaq: NFLX), Halliburton Co. (NYSE: HAL) and Starbucks Corp. (Nasdaq: SBUX).
The Tax Cuts and Jobs Act established a 21% corporate income tax rate, meaning companies pay 21% of their taxable income in federal taxes.
The report — which did not account for any state or local taxes, nor do the tax expenses necessarily match private tax filings — also found that the 379 companies picked up an additional $765 billion in pretax profits.
“Had all of those profits been reported to the IRS and taxed at the statutory 21% corporate tax rate, the 379 companies would have paid almost $161 billion in income taxes in 2018,” the report said.
Bank of America Corp. (NYSE: BAC) had the largest amount of tax subsidies in 2018 — $5.5 billion. Amazon had tax subsidies that totaled $2.4 billion while Verizon Communications Inc. (NYSE: VZ) had $1.7 billion in subsidies.
Companies producing industrial machinery had the lowest effective federal tax rate in 2018 — minus-0.6% — while utilities, motor vehicles and parts, oil, gas and pipelines and chemicals had an effective federal tax rate of less than 5%.
Only internet services and retail, computers, pharmaceuticals and medical products and health care had an effective tax rate of 20% or more.
All told, the report said the federal government lost out on nearly $74 billion in taxes from those 379 Fortune 500 companies.
The report was first covered by The Washington Post.
