265 Major, Profitable U.S. Corporations' Tax Avoidance
Costs States $42 Billion Over Three Years; Sixty Eight
Companies Have At Least One Tax-Free Year
Citizens for Tax Justice
December 7, 2011
http://www.ctj.org/corporatetaxdodgers50states/CorporateTaxDodgers50StatesPR.pdf

Washington, DC -- A comprehensive new study that
profiles 265 consistently profitable Fortune 500
companies finds that 68 of them paid no state corporate
income tax in at least one of the last three years and
20 of them averaged a tax rate of zero or less during
the 2008-2010 period. These are among the findings in
"Corporate Tax Dodging in the Fifty States, 2008-2010"
released today by the Institute on Taxation and Economic
Policy (ITEP) and Citizens for Tax Justice (CTJ).

"Our report shows these corporations raked in a combined
$1.33 trillion in profits in the last three years, and
far too many have managed to shelter half or more of
their profits from state taxes," said Matthew Gardner,
Executive Director at the Institute on Taxation and
Economic Policy and the report's co-author. "They're so
busy avoiding taxes, it's no wonder they're not creating
any new jobs."

Among the 20 corporations who paid zero or less in state
corporate income taxes over the three year period are:

Utility provider Pepco Holdings (DC); pharmaceutical
giant Baxter International (IL); chemical maker DuPont
(DE); fast food behemoth Yum Brands (KY); high tech
manufacturer Intel (CA). All 265 corporations,
headquartered in 36 states, are listed in the report at
www.ctj.org/corporatetaxdodgers50states.

"Corporate Tax Dodging in the Fifty States, 2008-2010"
concludes that these 265 corporations cost states $42.7
billion in lost revenues in the last three years, and
Gardner identifies three chief causes for state
corporate tax revenues steadily declining for two
decades. First, state lawmakers continue to enact tax
subsidies requested by corporations, most of which don't
produce the promised economic results. Second, federal
tax breaks enacted in the past decade further reduce
state corporate income tax revenues since states
generally accept corporations' federal tax numbers.
Third, said Gardner, "and most insidious, is that multi-
state corporations themselves devote their money and
legal firepower to coming up with tax avoidance
schemes."

The report describes profit shifting and other common
corporate tax avoidance strategies and outlines several
reforms state lawmakers can immediately implement to
ensure profitable corporations doing business in each
state pay closer to the statutory rate, including:

	* Implement combined reporting, which
	effectively treats a parent company and its
	subsidiaries as a single corporation for state
	tax purposes. It eliminates most of the
	advantage of shifting profits into Delaware,
	Nevada and other low- or no-tax states.

	* Decouple from federal tax loopholes, such as
	bonus depreciation, and other provisions which
	reduce the amount of taxable income corporations
	have to claim in their state tax filings.

	* Increase disclosure, transparency and
	accountability. Corporations should be required
	to publicly report their in-state profits, as
	well as any subsidies or loopholes they are
	exploiting each year.

"Corporate Tax Dodging in the Fifty States, 2008-2010"
follows up on "Corporate Taxpayers and Corporate Tax
Dodgers, 2008-2010" which was published in November by
Citizens for Tax Justice (CTJ) and the Institute on
Taxation and Economic Policy (ITEP). The two groups
released their first major study on the federal income
taxes that large, profitable American corporations pay
on their U.S. pretax profits in 1984. Because few states
have transparency regarding business taxes, it is not
possible to determine specific tax amounts paid by
corporations to individual states; all figures in
"Corporate Tax Dodging in the Fifty States, 2008- 2010"
are aggregate for taxes paid to all U.S. states by each
corporation.

The newest study is online at
www.ctj.org/corporatetaxdodgers50states.

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