(Original Post)
BY JIM DOYLE jdoyle@post-dispatch.com > 314-340-8372 | Posted: Friday, November 4, 2011 12:00 am
A new report on corporate taxation identifies Tenet Healthcare Corp., Boeing Co., and Wells Fargo & Co. as among 30 profitable companies nationwide that paid no net federal tax over the past three years.
The study, titled "Corporate Taxpayers & Corporate Tax Dodgers 2008-10," was released by Citizens for Tax Justice and the Institute for Taxation and Economic Policy, two nonprofit advocacy groups based in Washington.
The study looked at the past three tax years combined. Some companies paid tax in some years but enjoyed tax breaks in other years that offset those payments — meaning they paid no tax overall during the period, according to the study.
The study says 280 of the largest publicly traded U.S. companies faced federal income tax bills equal to 18.5 percent of their profits in the past three years — little more than half the official corporate rate of 35 percent.
The study reported some companies having a negative effective tax rate, meaning they paid no taxes and in fact enjoyed rebates. This can take place by carrying back excess tax deductions or credits to an earlier year or years and receiving a tax refund check from the U.S. Treasury Department, according to the study.
Boeing executives sharply disputed the study's conclusions, arguing it paid taxes at effective rates between 26 and 34 percent over the past three years — rather than the minus 1.8 percent rate reported in the study. The company, which has nearly 15,000 employees locally, earned total profit of $9.7 billion in 2008, 2009, and 2010, according to the study.
The advocacy groups used information from the companies' regulatory filings to conclude that a quarter of the 280 companies owed less than 10 percent of profits in federal income taxes for the 3-year period.
But the companies' regulatory filings can differ from their federal tax returns, which most companies do not disclose. Some companies argued that the study understated their tax payments by omitting deferred taxes that they may pay in future years.
Tenet Healthcare, which is based in Dallas, operates 49 hospitals, including two locally: St. Louis University Hospital and Des Peres Hospital. Tenet employs about 2,500 people in the St. Louis area.
According to the study, Tenet earned a total of $415 million in profits in 2008, 2009, and 2010, but its effective tax rate was minus 11.6 percent for the three-year period. However, the study did not say whether Tenet's accumulated losses from 2003 to 2007 affected the negative tax rate.
Tenet spokesman Rick Black told the Post-Dispatch last month that the company's current effective tax rate, after deductions and tax credits, was 39 percent. He did not return calls Thursday seeking comment on the new study.
Wells Fargo, which employs more than 6,100 people here, recorded the biggest reduction in taxes. The banking company reported a total of $49 billion in profits in 2008 through 2010, but its effective tax rate was minus 1.4 percent, the study said.
Company executives said much of the tax savings came from write-offs obtained after its 2008 purchase of Wachovia, which incurred big losses during the financial crisis.
The New York Times contributed to this report.