Ten Huge Companies Dodged State Taxes for Five Years

States, often burdened by budget deficits that grew during the recession, are not getting tax receipts from some of America’s largest companies. Among them are Boeing Co. (NYSE: BA) and Merck & Co. Inc. (NYSE: MRK), which have not paid taxes for five years, according to a new study by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.

The study looked at 269 Fortune 500 companies that were profitable every year between 2008 and 2012.

Among the findings:

  • If these 269 corporations had paid the 6.25 percent average state corporate tax rate on the $2.3 trillion in U.S. profits that they reported to their shareholders, they would have paid $143 billion in state corporate income taxes over the 2008-12 period. Instead, they paid only $70.2 billion. Thus, these 269 companies avoided a total of $73.1 billion in state corporate income taxes over the five years.
  • 90 of the 269 companies managed to pay no state income tax at all in at least one year from 2008 through 2012, despite telling their shareholders they made $169 billion in pretax U.S. profits in those no-tax years. Thirty-seven of these companies enjoyed multiple no-tax years.
  • Eight companies, including Dupont, International Paper, and Tenet Healthcare, paid no net state income tax in at least three years during this five-year period.
  • And ten companies, including Boeing, Merck, and Rockwell Automation, managed to pay zero or less in state income tax during the five-year period taken as a whole.
  • In 2012 alone, 25 companies paid no state income tax. Another 127 of the companies paid less than half the weighted-average statutory state corporate tax rate that year, meaning that more than half of the companies in our sample paid less than half the average legal state tax rate in that year.

The other companies among the 10 that paid no taxes over the five years measured were Pepco Holdings Inc. (NYSE: POM), Levi Strauss, MetroPCS, American Electric Power Co. Inc. (NYSE: AEP), Apache Corp. (NYSE: APA), International Paper Co. (NYSE: IP) and E.I. du Pont de Nemours and Co. (NYSE: DD), better known as DuPont.

Citizens for Tax Justice and the Institute on Taxation and Economic Policy are considered liberal research firms, so it comes as no shock that they want a number of state tax loopholes closed so that these companies take on large tax burdens.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.