WASHINGTON: Fifteen U.S. corporations including online retailer Amazon.com Inc, power company Duke Energy Corp and insurer Prudential Financial Inc avoided U.S. tax on nearly $25 billion in combined profits last year, a tax watchdog group said on Tuesday.
A report by the Institute on Taxation and Economic Policy, or ITEP, said data showed how profitable Fortune 500 companies have routinely lowered their tax bills long before the Republican tax overhaul signed into law by President Donald Trump in December.
The 15 corporations had profits of $24.5 billion in 2017 but managed to obtain nearly $1.4 billion in rebates from the U.S. Treasury for a combined tax rate of minus 5.6 percent, according to the ITEP report, which examined corporate income tax disclosures.
The nonpartisan group said the new U.S. tax regime, which slashed the corporate income tax rate from 35 percent to 21 percent beginning in January, will likely allow corporations avoid even more tax.
ITEP said while “disclosures made by these companies are too vague to allow a complete diagnosis of how they are avoiding income taxes” they used a variety of tax breaks to cut their tax bills.
Amazon received a $137 million federal rebate on $5.4 billion in U.S. profits, resulting in an effective tax rate of negative 2.5 percent, by using a tax break that allows companies to write off the value of executive stock options, according to ITEP.
Charlotte, North Carolina-based Duke Energy obtained a $247 million rebate on $4.2 billion in U.S. profits by using accelerated depreciation on capital investments and renewable energy production tax credits to lower its federal tax rate to a minus 5.9 percent, the report said.
Officials at Amazon.com and Duke Energy were not immediately available for comment.
Last year’s tax legislation dramatically expanded the depreciation tax break used by Fortune 500 corporations, the group said.
Prudential Financial, which has operations in investment management and other financial services in addition to insurance, reduced its effective federal tax rate to negative 1.9 percent on $2.5 billion in U.S. profits partly through low-income housing credits, ITEP said.