General Electric has been in the news lately because of this NYTimes article, which points a finger at the fact that the company paid no income taxes in 2010 despite earning $5.1 billion in profits from its business in the U.S. That’s effectively a 0% tax rate for last year.
A writer at Forbes did some analysis to see what G.E. and other big companies were paying in taxes for 2010 and discovered that most of the top companies paid taxes near or above the standard 35% tax rate imposed on U.S. corporations.
In the case of G.E., Forbes found that the company in fact did show $1 billion in taxes against $14 billion in worldwide profit. That works out to a tax rate of 7.4%, which is low but not exactly zero as the NYTimes suggests. Some of the reasons for G.E.’s low rate include tax breaks coming from its activities in nuclear and clean energy as well as the losses from the financial meltdown that are carried forward and reduce taxable income.
Here’s what the five biggest U.S. companies paid in taxes for 2010:
Pretax income: $52 billion
Income taxes (worldwide): $21.6 billion
Income tax rate: 45%
In addition to income taxes, Exxon will also pay almost $70 billion in sales and excise taxes around the world. The oil company’s income taxes to be paid in the U.S. are about $3 billion for 2010.
Pretax income: $19.8 billion
Income taxes: $8.3 billion
Tax rate: 42%
Conoco will also pay about $17 billion in sales and excise taxes for 2010.
Pretax income: $32 billion
Income taxes: $12.9 billion
Tax rate: 40%
The oil company set aside about $13 billion for 2010 income taxes and the remaining pretax income will primarily go to pay about $18 billion in sales and excise taxes.
4. Goldman Sachs
Pretax income: $12.9 billion
Income taxes: $4.5 billion
Tax rate: 35.2%
Goldman would have incurred a tax rate of 32.7% without special circumstances in 2010, including $1 billion due to a settlement with the SEC and payroll taxes in the U.K.
5. Wells Fargo
Pretax income: $19 billion
Income taxes: $6.3 billion
Tax rate: 33.9%
This year’s tax rate is up over 2009′s due to legislative changes to accounting rules relating to healthcare reform.
See the complete top 20 companies here.