How much do Illinois companies pay in state taxes? – Government News

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28 April 2017 | 10:30 am

Illinois’ Fortune 500 companies are paying less and less in state corporate taxes—and sometimes, almost nothing at all.

A new report by the Institute on Taxation and Economic Policy found certain corporations are finding ways to shelter much of their profit from state taxes. The eight-year study looked at 240 Fortune 500 companies from 2008 to 2015. Of those, 17 are headquartered in Illinois.

It found that the average effective state tax rate paid by the companies is 2.9 percent. The average statutory state corporate tax rate is 6.25 percent, which means these corporations paid less than half the average effective state tax rate.

Above is a look at the Illinois companies on the list, all of which paid less than the average effective state tax rate in past eight years. (Click here to enlarge.)

Chicago-based Boeing, which topped the list of Illinois companies that paid the least in state taxes, paid 0.1 percent over the eight-year period.

REDUCED RATES

So how do they do it? Loopholes include shifting profits between states, writing off executive stock options, tax incentives for companies that bring jobs to the state, and accelerated depreciation, which allows corporations to write off the cost of their capital investments much faster than those assets actually wear out.

“Those are the tax breaks that we know about,” said Matt Garner, Senior Fellow at ITEP. “It’s important to emphasize that in many cases it’s impossible to determine from the limited financial disclosures these companies make exactly what they’re doing to reduce their effective tax rates as much as they have.”

The study is the third in a series of reports that looked at the taxes paid by the most consistently profitable Fortune 500 corporations. Another, “The 35 Percent Corporate Tax Myth,” was released in March and found similar findings on a federal level—specifically, that 100 companies paid nothing in federal corporate taxes during at least one of the last eight years.

The report comes the same week the Trump administration introduced a giant tax cut that would benefit businesses, the middle class and certain high-earning individuals.

“I think this report should be understood not as an indictment of the tax avoidance strategies practiced by businesses in general but as an indictment of a situation that benefits some companies, especially big multinationals at the expense of others,” Garner said.

Here’s the full list of companies from the report. Click here to enlarge.



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