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Report: Big Companies Avoiding State Taxes

Report: Big Companies Avoiding State Taxes

March 31, 2014- Tom Joseph
HARRISBURG, Pa. - As the deadline closes in on Pennsylvania lawmakers to pass another tight budget, a report from the Institute for Taxation and Economic Policy shows that profitable Fortune 500 companies around the country pay little in state corporate income taxes. The report finds that companies constantly ask for more tax breaks, even as most already have seen their state tax rates decline since 2008.

According to Matt Gardner, director of the ITEP, some of those firms even collect refunds after paying zero taxes.

"I think part of the reason you see so many companies asking for these corporate handouts is that they know there's a track record of success," he said.

Gardner said he hopes the report serves as a reason for lawmakers to embark on corporate tax reform, though he acknowledged that's a tough job, because, he said, legislators often don't know what corporate taxes look like.

"It's ludicrous that state lawmakers are being lobbied by these companies for further tax cuts without knowing whether these companies are paying any corporate taxes to begin with."

The report examined tax records of 269 large corporations - all profitable - and found that collectively, they avoided paying more than $73 billion in state corporate taxes. Ninety of those companies, one in three, paid no state income tax at all.

Pennsylvania's corporate income tax rate is 9.99 percent, which is one of the highest in the country. A recent report from the Pennsylvania Budget and Policy Center revealed that in recent years, some companies have been given tax breaks that cut those corporate tax rates by two-thirds or more.

The report, "90 Reasons We Need State Corporate Tax Reform," is at CTJ.org.

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