By GARETT SLOANE
Last Updated: 2:26 PM, February 21, 2013
Posted: 11:46 PM, February 20, 2013
When it comes to tech and taxes, Facebook isn’t the only one catching big breaks.
LinkedIn also got relief from the IRS, paying no federal income tax over the past three years — despite notching $160 million in profits, according to a corporate tax watchdog.
The Mountain View, Calif., social network for professionals escaped the tax man because of a rule that allows companies to deduct expenses from employee stock awards, the watchdog, the Center for Tax Justice, told The Post.
It’s a longstanding accounting trick that has spared many tech firms — including Amazon and Yahoo from 2009 to 2011 — from sharing any of their profits with the IRS, the CTJ said.
LinkedIn, led by co-founder Reid Hoffman, used stock awards to bring its tax bill to zero.
“On $160 million profits over the last three years, LinkedIn paid zero federal income taxes,” said the CTJ’s Rebecca Wilkins. “The stock option deduction was big enough to wipe out all their taxes.”
The group has criticized the tax rules, which it considers a corporate loophole that allow companies to take the deduction when employees exercise stock options at prices that are far higher than they were when the shares were awarded. The difference in price is recorded as an expense.
Facebook saw a refund after filing for $1 billion in tax breaks in 2012. Mark Zuckerberg’s company got back $429 million from federal and state coffers, according to the CTJ.
The accounting moves spared Facebook any taxes on its $1.1 billion in profits last year.
LinkedIn nullified its bill with the feds and California, but did cut a check for $2.8 million, most likely for overseas taxes, according to the CTJ’s Matthew Gardner.
LinkedIn did not return a request for comment.
The company would have owed $34.3 million to Uncle Sam and California without its $35.8 million benefit from the exercise of stock options.
New York Post: LinkedIn paid no federal income tax over past three years