The social network colossus Facebook clicked its way to more than $1.1 Billion in profits in the year 2012. You’d think that would in turn generate a lot of tax revenue for the government of the United States. And, you’d be wrong.
A new report from the watchdog group “Citizens for Tax Justice” says Facebook did not pay as much as a penny in Federal and State taxes. Instead, “Facebook says it will receive net tax refunds totaling $429 million.”
The report explains the accounting trick, “Facebook’s income tax refunds stem from the company’s use of a single tax break, the tax deductibility of executive stock options. That tax break reduced Facebook’s federal and state income taxes by $1,033 million in 2012, including refunds of earlier years’ taxes of $451 million.”
Critics say these tricks used by Facebook and other corporations unfairly shift the burden onto families and small businesses.