Guess which company made $1.1 billion in profit and doesn't owe a dime in taxes?
For those of us who live paycheck-to-paycheck, grouse about the taxes that come out of every check, fret about our miniscule savings accounts or sigh over our ever-growing credit card debt, it's painful to read about companies with gross profits that top more than $1 billion and they don't have to pay a dime in taxes. What might make matters worse for some is that one of the country's most profitable -- and popular -- technology companies reported 2012 U.S. profits of $1.1 billion, but didn't have to give Uncle Sam any of it.
According to Citizens for Tax Justice, Facebook is the recipient of a free pass on federal and state income taxes for 2012. Beyond not owing any taxes, Citizens for Tax Justice said that Facebook will also actually receive net tax refunds that come to $429 million. Not bad, huh?
So how did Facebook manage to skate on its tax bill and get a refund? The organization said that the income tax refunds come from a single tax break that allows the company to deduct its executive stock options. (We're wondering how all those who purchased the social networking site's stock on the day of the IPO at a price of $38 a share feel about this -- on Tuesday, the stock closed at $28.93.)
It should be noted that Facebook is not the only corporation that benefits from such tax breaks.
To read the entire report, go here.