A study of federal corporate income tax payments over five years revealed a lot about the tax avoidance skills of some of our favorite companies. Very few Fortune 500 firms came close to the maximum statutory rate of 35%. Some paid nothing at all.
The American consumer loves its soft drinks, computers, cell phones, and bank accounts. The next time you buy a can of pop be aware that Coca Cola paid a smaller percentage in federal income taxes (6.5%) than Pepsi (13.6%). In the tech industry, Hewlett-Packard (2.9%) and IBM (3.3%) both paid much less than the industry average of about 20%. While Bank of America has received most of the attention for tax avoidance, it seems more respectable next to Citigroup, which had revenues of almost $400 billion but claimed an overall 5-year loss and received a $5 billion refund.
How about the all-important industry that provides our cell phones? Of the two biggest telecommunications companies, Verizon lagged way behind, paying federal taxes at a 9% rate, compared to AT&T's 22%.
Getting gouged at the pump? Don't buy from Exxon or Chevron, which paid 3.6% and 5.6%, respectively.
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In many industries companies tended to be lumped together in federal tax payment percentages, as if adapting to similar accounting protocols. Most retail stores paid between 24-32%. Tech firm came in a little lower, at 16-25%. Most food processing and fast food companies paid between 10-20%.
Any good news? The little guy in cell phones, US Cellular, paid almost 35% in federal taxes. Dr. Pepper's 31% rate far surpassed Coke and Pepsi. And enjoy your coffee at Starbucks, which paid 33%.
Detailed results for the study can be found at PayUpNow.org/rankings.