Crummy 2018 Refund? These Corporate Tax Dodgers Made Billions - and Got $4.3 Billion Back

While many Americans were grumbling over lower-than-expected tax refunds this year, 60 corporate tax dodgers - all of whom turned a profit in 2018 - paid zero in taxes. But that's not the worst of it...

Most of the following companies actually received millions of dollars in rebates.

According to the Internal Revenue Service, the total amount of tax refunds to individual citizens this year was $4.4 billion lower than it was last year.

Meanwhile, according to an analysis by the Institute on Taxation and Economic Policy (ITEP), those 60 U.S. corporations collected tax rebates worth $4.3 billion - despite earning $79 billion in profits.

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It comes down to changes made in the 2017 Tax Cuts and Jobs Act. Several groups of individual taxpayers lost big deductions. Residents of high-tax states got hit with the new $10,000 cap on deductions for state and local taxes.

The 2017 tax reform law also suspended deductions for unreimbursed employee expenses, an important deduction for workers such as telecommuters, traveling salespeople, and construction workers.

But tax breaks for corporations were mostly left untouched, while the corporate tax rate was chopped from 35% to 21%. That doubled the number of profit-making companies paying no taxes. And U.S. tax revenue from corporations plunged 31% from fiscal 2017 to fiscal 2018, a reduction of $92 billion to the U.S. Treasury.

Individual taxpayers, however, paid $97 billion more in FY2018.

Here's how the corporations are getting away with this...

Corporate Tax Avoidance 101

Corporations have many tax breaks and loopholes at their disposal.

For example, Inc. (NASDAQ: AMZN) lopped $1 billion off its obligations by using a tax break for stock options. Hundreds of companies use this break every year.

Companies also use a variety of tax credits to lower their tax bill. Last year, Netflix Inc. (NASDAQ: NFLX) had $140 million worth of research and development credits. Video game company Activision Blizzard Inc. (NASDAQ: ATVI) claimed $46 million in R&D credits.

A change in the 2017 law allows companies to claim the full amount of a capital investment (typically equipment and facilities) in the same year in which it was made. Previously, companies claimed a tax break on capital expenditures by depreciating the item over a period of years.

Sectors with high levels of capex, such as energy companies and airlines, were only too happy to exploit this change in their 2018 taxes. Chevron Corp. (NYSE: CVX) reduced its taxes by $290 million with this trick, while Halliburton Co. (NYSE: HAL) saved $320 million. In all, ITEP reports, companies shaved $8 billion from their taxes using this break.

Then there are the corporate tax breaks targeted at particular sectors. Again, energy is a prime beneficiary. Thanks to the enhanced oil recovery credit, Occidental Petroleum Corp. (NYSE: OXY) trimmed $158 million off its 2018 tax bill.

Alternative energy credits are just as lucrative. Duke Energy Corp. (NYSE: DUK) snagged $128 million worth of renewable energy credits. DTE Energy Co. (NYSE: DTE) managed a tax reduction of $223 million with production credits.

With so many ways to thwart the tax man, it's no wonder almost every one of the companies on ITEP's list got millions of dollars back from the government.

About half of the companies on the list made billions in U.S. profits and still got hefty rebates. EOG Resources Inc. (NYSE: EOG) had income in excess of $4 billion and yet earned a rebate of $304 million.

Here's the full chart, with all 60 companies, how much U.S. profit they earned in 2018, and how much they got back from the government:

60 Corporate Tax Dodgers That Made the Government Pay

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U.S. income and federal tax figures in millions of dollars.

Company Ticker U.S.


Federal Tax Effective Tax Rate Industry
Activision Blizzard ATVI $447 -$228 -51% Computers, office equip, software, data
AECOM Technology ACM $238 -$122 -51% Engineering & construction
Alaska Air Group ALK $576 -$5 -1% Transportation AMZN $10,835 -$129 -1% Retail & wholesale trade
Ameren AEE $1,035 -$10 -1% Utilities, gas, and electric
American Electric Power AEP $1,943 -$32 -2% Utilities, gas, and electric
Aramark ARMK $315 -$48 -15% Miscellaneous services
Arrow Electronics ARW $167 -$12 -7% Retail & wholesale trade
Arthur J. Gallagher AJG $322 - - Financial
Atmos Energy ATO $600 -$10 -2% Utilities, gas, and electric
Avis Budget Group CAR $78 -$7 -9% Motor vehicles and parts
Celanese CE $480 -$142 -30% Chemicals
Chevron CVX $4,547 -$181 -4% Oil, gas, & pipelines
Cleveland-Cliffs CLF $565 -$1 0% Oil, gas, & pipelines
CMS Energy CMS $774 -$67 -9% Utilities, gas, and electric
Deere DE $2,152 -$268 -12% Industrial machinery
Delta Air Lines DAL $5,073 -$187 -4% Transportation
Devon Energy DVN $1,297 -$14 -1% Oil, gas, & pipelines
Dominion Energy D $3,021 -$45 -1% Utilities, gas, and electric
DTE Energy DTE $1,215 -$17 -1% Utilities, gas, and electric
Duke Energy DUK $3,029 -$647 -21% Utilities, gas, and electric
Eli Lilly LLY $598 -$54 -9% Pharmaceuticals & medical products
EOG Resources EOG $4,067 -$304 -7% Oil, gas, & pipelines
FirstEnergy FE $1,495 -$16 -1% Utilities, gas, and electric
Gannett GCI $7 -$11 -164% Publishing, printing
General Motors GM $4,320 -$104 -2% Motor vehicles and parts
Goodyear Tire & Rubber GT $440 -$15 -3% Motor vehicles and parts
Halliburton HAL $1,082 -$19 -2% Oil, gas, & pipelines
Honeywell International HON $2,830 -$21 -1% Industrial machinery
International Business Machines IBM $500 -$342 -68% Computers, office equip, software, data
JetBlue Airways JBLU $219 -$60 -27% Transportation
Kinder Morgan KMI $1,784 -$22 -1% Oil, gas, & pipelines
MDU Resources MDU $314 -$16 -5% Oil, gas, & pipelines
MGM Resorts International MGM $648 -$12 -2% Miscellaneous services
Molson Coors TAP $1,325 -$23 -2% Food & beverages & tobacco
Netflix NFLX $856 -$22 -3% Retail & wholesale trade
Occidental Petroleum OXY $3,379 -$23 -1% Oil, gas, & pipelines
Owens-Corning OC $405 -$10 -2% Miscellaneous manufacturing
Penske Automotive Group PAG $393 -$16 -4% Motor vehicles and parts
Performance Food Group PFGC $192 -$9 -4% Retail & wholesale trade
Pioneer Natural Resources PXD $1,249 - - Oil, gas, & pipelines
Pitney Bowes PBI $125 -$50 -40% Computers, office equip, software, data
PPL PPL $1,110 -$19 -2% Utilities, gas, and electric
Principal Financial PFG $1,641 -$49 -3% Financial
Prudential Financial PRU $1,440 -$346 -24% Financial
Public Service Enterprise Group PEG $1,772 -$97 -5% Utilities, gas, and electric
PulteGroup PHM $1,340 -$44 -3% Miscellaneous manufacturing
Realogy RLGY $199 -$13 -7% Miscellaneous services
Rockwell Collins UTX $719 -$16 -2% (acquired by United Technologies Nov. 2018)
Ryder System R $350 -$23 -7% Transportation CRM $800 - - Computers, office equip, software, data
SpartanNash SPTN $40 -$2 -4% Retail & wholesale trade
SPX SPXC $66 -$5 -8% Industrial machinery
Tech Data TECD $203 -$10 -5% Retail & wholesale trade
Trinity Industries TRN $138 -$19 -14% Miscellaneous manufacturing
UGI UGI $550 -$3 0% Utilities, gas, and electric
United States Steel X $432 -$40 -9% Metals & metal products
Whirlpool WHR $717 -$70 -10% Electronics, electrical equipment
WEC Energy Group WEC $1,139 -$218 -19% Utilities, gas, and electric
Xcel Energy XEL $1,434 -$34 -2% Utilities, gas, and electric
TOTAL $79,025 -$4,300 -5%

Source: Institute on Taxation and Economic Policy analysis of SEC filings

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About the Author

David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

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