Facebook Will Pay No Taxes, Get Huge Refund Instead
During the year it went public, Facebook made $1.1 billion in profits. But thanks to some nifty accounting, the company won't be paying any federal or state taxes on it — instead, it will actually be receiving a federal tax refund of about $429 million.
Citizens for Tax Justice, a research group, predicted this would happen back when Facebook went public last year, and just released a breakdown of what Facebook pulled off in its 2012 annual report.
Essentially, because of a tax deductibility on executive stock options, options which Facebook gave out plenty over the past year, the deductible ended up actually equaling more than Facebook owed in taxes to the state and federal governments. So instead of paying anything to the government, the government will instead be paying Facebook a refund of almost half a billion dollars. The refund comes on taxes they had paid in 2010 and 2011.
Not only that, but Facebook is actually carrying "forward another $2.17 billion in additional tax-option tax breaks for use in future years." Basically, they would like to do this every year.
One of our most successful new companies is not paying a dime in taxes.
Yes, let's please cut Medicare. That's the thing that's broken.