Crossposted on my blog.
In a recent (May 17) post on BMG I was challenged to name names of corporations which had paid little or no corporate income tax in Massachusetts. In light of the importance of this issue, given the hearing on Tuesday (May 22 at 4 PM in the Gardner Auditorium) of the new Commission that is studying corporate tax issues, I thought a separate post was in order.
More below the fold.
So far as I know, Wisconsin is the only state that discloses corporate tax return information. See this interesting analysis of taxes paid (or, not paid) by Wal-Mart in that state, and also nationally.
In any case, Massachusetts does not make that information publicly available, so we can only infer information about the Bay State from things we learn in national studies. The best report I have been able to find is a couple of years old. I’m sure not all that much has changed in that time, although there are significant changes afoot. A one-page update by the Institute on Taxation and Economic Policy shows that New York and West Virginia have recently joined the list (now up to 20) of states that require combined reporting so as to reduce the most egregious forms of corporate tax avoidance. The list also shows that 7 states (including Massachusetts) are considering this reform, and for 4 states it is irrelevant because of the nature of their tax system, leaving a minority of 19 states that have not joined the bandwagon. A glance at the list of states that do require combined reporting suggests that combined reporting may already (or at least may soon) account for the majority of corporate revenues in the country, since the list includes the states of California, Texas, and New York; and several other large states are considering moving that way.
I have posted the following, along with a link to the full report on my blog:
Corporate Tax Avoidance In the States
This press release details the main conclusions of a report prepared by the Citizens for Tax Justice and the Institute on Taxation and Economic Policy covering the 252 largest corporations in America which had fully disclosed their state and local tax payments for the years 2001, 2002, and 2003.
o 71 of the 252 companies managed to pay no state income tax at all in at least one year from 2001 through 2003
o Some companies, such as Toys R Us, AT&T, Boeing, Eli Lilly, Merrill Lynch, and ITT Industries, paid no net state income tax over the full three-year period.
o In 2003 alone, 35 companies paid no state income tax.
o Since fiscal 1989, total state corporate income taxes have fallen by an average of almost 40 percent as a share of the economy.
o As a result, individual taxpayers and purely in-state (usually smaller) businesses are paying a heavy price, in the form of higher taxes, reduced public services and unfair competition.