Report: Facebook paid no income tax last year

While most of country is getting hit with higher taxes, the social-media giant got a pass -- and even got $429 million in refunds.

By Aimee Picchi Feb 15, 2013 4:01PM

Facebook logo (Daniel Acker/Bloomberg via Getty Images)Taxes are said to be one of life's inevitabilities -- unless you're Facebook (FB), which last year not only didn't pay a cent in federal or state income taxes, but actually will receive tax refunds of $429 million, according to a new report.

The reason? Even though Facebook made a pre-tax profit of $1.06 billion last year, it benefited from a tax break: the tax deductibility of executive stock options, the report from the Citizens for Tax Justice says. 

That reduced Facebook's federal and state income taxes by $1.03 billion last year. But it also is carrying forward another $2.17 billion in additional tax-option tax breaks for use in future years, the report says. Altogether, that means Facebook will shave off a total of more than $3 billion in current and future taxes. 

To be sure, Facebook isn't alone among big corporations in tapping strategies to lower their tax burdens. Among those businesses that have come under fire for avoiding taxes are General Electric (GE), Boeing (BA) and Goldman Sachs (GS). 

Senator Bernie Sanders, an independent from Vermont, has sought to highlight the issue. In 2011, his office compiled a list of the worst corporate income tax avoiders, including Bank of America (BAC) and Citigroup (C). 

"[T]he wealthiest Americans and most profitable corporations must do their share to help bring down our record-breaking deficit," his office said in a 2011 statement. 

Facebook didn't immediately respond to an emailed request for comment, according to The Huffington Post. 

In the meantime, taxes for many individuals went up in 2013, making consumers feeling pinched.

On an after-tax basis, corporate profits have jumped since 2000, helped in part by strategies to minimize their tax burdens, according to the Huffington Post, citing data from the Commerce Department. 

More on moneyNOW

Feb 15, 2013 4:42PM

This is unfair that big companys dont pay any Taxes, Facbook or GE are good example of coruption in are goverment system.


Feb 15, 2013 4:35PM
This is a big scandal! If you are an owner of a small company fixing for example homes, cars or somebody's health you pay big tax.
Feb 15, 2013 5:01PM

Don't be angry with FaceBook.  They are following the laws of the corrupt people we elected.  Sickens me to death and people sit back and wonder WHY we are in the situation we are in.  Dumbing it down people.

Feb 15, 2013 5:19PM
Where is the OUTRAGE in the Media against Mark Elliot Zuckerberg?  Romeny gets blasted for PAYING MILLIONS in taxes but you hear nothing about Mark Zuckerberg not only NOT PAYING ANY TAXES but getting back 429 million in REFUNDS.  Things that make you go HMMMMMMMMMMMMMMM  Both Leftie companies up the Gov butt.
Feb 15, 2013 5:11PM
and peple complain about Romney, at least he pays MILLIONS in taxes.
Feb 15, 2013 6:07PM
FLAT TAX...FLAT TAX...on everybody and all exemptions, no deductions, no subsidies!!!!!!!!!!!!!!! it is the only fair and equitable system that i can think of. make $1,000,000 pay $100,000....make $1,000,000,000 pay $100,000,000...make $50,000 pay $5,000
Feb 15, 2013 5:48PM

Can someone explain this to me? How can someone pay no taxes and then get a refund? Refund im plies you have paid in already.


The government stalks small business to pay it's taxes and lets billion dollar corporations pay no

tax.  Thank Mr Obama and team!  If he really wanted to collect revenue for government spending he would collect them from big corporations.  But then he would get no campaign spending money.

Government at it's best.  Allow massive crime but punish the litlle guy for any infraction.  Where is the IRS when you need them??????????

Feb 15, 2013 6:39PM
When is outrage going to lead to action?
Feb 15, 2013 6:21PM
well if poeple STOP using FACEBOOK then this won't happen! DUH!!!!!!!!!!!!!! 
Feb 15, 2013 5:19PM
Democratic party used this media to their benefits during the election, ----nice to see the payback isn't it.
Feb 15, 2013 6:11PM
Feb 15, 2013 6:19PM
Wonder why the government is going broke?  Well this is a company that is getting almost HALF A BILLION back from a broke government when they should have paid HALF A BILLION in taxes.  Tax codes need to be re-written so these companies can no longer get the loop holes and rip off the US government.  When my taxes go up because of them their offices will start to burn down. 
Feb 15, 2013 5:18PM
Good -- probably intended -- timing as the Administration and Congress square off over whether to maintain lucrative tax breaks for oil companies, hedge fund managers, and other major private interests that are collectively doing quite well in the slowly recovering economy, to the tune of tens of billions per year. Or cut Federal funds to education, defense, food safety, border and transport security and all the other public goods that benefit most Americans, with the effect of the cuts hitting those hardest who have yet to benefit from the slowly recovering economy.
Feb 15, 2013 6:48PM
We need a flat tax. Everyone pays 5%. No deductions. Everyone has skin in the game and our government needs to have to work within that budget.
Feb 15, 2013 6:07PM
Billions in profit by getting people to sit on their asses and just get FATTER.
Feb 15, 2013 7:35PM

Why the hell should Facebook get a refund?! This company is absolutely worthless - both as an investment and as a site. Sorry, but these scumbags should have to pay like the rest of us. Who do they think they are? Congress??

Feb 15, 2013 5:06PM

Well good for them!



Feb 15, 2013 6:16PM

Loss carry-over and income averaging are just a couple of techniques that are also available to individuals and small businesses, if circumstances are appropriate. This provides some stability for individuals and companies over time that mitigates the impact of severe events so could be considered fair or at least equitable.

The tax deductibiility of executive stock options is a different matter. Thhat is a specific political agenda item meant to influence how business operate as the myriad 'loop holes' are meant to influence both individual and corporate behavior. Essentially political social engineering. Unfortunately this is rarely, if ever, used for encouraging behaviors that help individuals, companies, and thus the government, be on better financial and economic footing (time-tested fundamentals like adequate saving reserves, investment in education for individuals or re-investment in companies to support growth and sustainability, etc). Mortgage interest deductions encourage home ownership but were exploited for second homes and questionable realestate gambles. Now we hear that the deduction is supposed to go away. It won't stop the questionable gambles but may hurt many pocketbooks.

Feb 15, 2013 7:38PM

Unfortunately the article is misleading. This is not a loophole or a tax break.... what the article doesn't says is the deduciton is attributable to the fact that all employees of Facebook, including Zuckerberg were required to pay tax on the value of the stock options they received.  This created BILLIONS of dollars in taxable income from those who were granted Facebook stock options.  I know it is hard for for people to understand but it really is truly not a loophole or something Facebook should be scorned for.  No one should arguing that the same dollars to be taxed twice!

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