Facebook, Google, Apple: What are their tax rates?

How much are the biggest American tech companies paying in taxes? Amid calls for reforming tax codes and investigations into some of the companies’ tax practices, here’s a look at their tax rates.

Facebook and Amazon are among the companies with the highest tax rates overall, while Google, Gilead Sciences and IBM are among those with the lowest tax rates. That’s according to WalletHub, the credit website, which analyzed the 2015 tax rates of S&P 100 companies at the state, federal and international levels, and released its study today.

WalletHub found that tech companies continue to pay more than 25 percent lower taxes abroad, as they did in 2013 and 2014.

Some tech-company highlights from the findings:

  • Facebook’s state and federal tax rates total 84.8 percent, putting it at No. 3 on the list of companies that pay the highest tax rates in the nation. The Menlo Park-based company had a federal tax rate of 78.9 percent and a state tax rate of 5.9 percent. Its overseas tax rate was 3.8 percent, which landed it on No. 5 on the list of companies with the lowest international tax rates. Its overall tax rate was 40.5 percent.
  • Amazon was No. 3 on the list of companies with the overall highest tax rates, with 60.6 percent.
  • Google was among the tech companies that had the lowest overall tax rate, with 16.8 percent. It had a 6.2 percent international tax rate.
  • Gilead Sciences had a 16.4 percent overall tax rate, and IBM’s was 16.2 percent.
  • Apple had disclosed during its recent earnings report that its overall tax rate was 26 percent. The world’s most valuable publicly traded company had a 60.8 percent federal tax rate and 4.2 percent state rate. Its international tax rate was 6.2 percent.
  • IBM, which had a 3.9 percent and 4.1 percent state and federal rate, respectively (among the lowest in the nation), had a 21 percent international tax rate.

For the tax rates of other tech companies in the S&P 100, such as Cisco, Intel, Microsoft, Oracle and others, you can find the full report on WalletHub’s website.

The report drew from data from the IRS, corporate annual reports and Quantira Strategies.

Update: To calculate the companies’ overall tax rates, WalletHub used total income (domestic + foreign) and total income tax provisions (for current and deferred income taxes at state, federal and foreign level). To calculate the federal tax rates, WalletHub used the following formula: (federal current tax provisions + federal deferred tax provisions)/domestic income.

The methodology drew criticism from at least one tax-policy expert.

Including deferred taxes “doesn’t reflect the reality of how these companies pay taxes,” said Matthew Gardner, executive director of the Institute on Taxation and Economic Policy, which partners with nonprofit advocacy group Citizens for Tax Justice.

WalletHub says its report “never claims to portray what companies end up paying. It shows their effective tax rates — what they expect to pay when filing their SEC annual reports.”

(End update)

 

Photo from Getty Images

 

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  • clay

    I thought the max corporate tax rate in the USA was 35%.
    Where are you coming up with this 78.9% number?

    • Levi Sumagaysay

      I’ve heard back from WalletHub and inserted in the section marked as updated how they came up with the numbers.

 
 
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