Boeing paid no taxes in the US in 2013
New research shows that US aerospace company Boeing paid no tax in 2013.
According to analysis of the company's recent government filings by the Center for Effective Government and reported by the Huffington post, Boeing reported an $82 million tax refund last year, but made $5.9 billion in U.S. pre-tax profits during the same period. Boeing was therefore estimated to have paid a federal tax rate of -1.4 percent.
According to the report, during the same period, the company won 4.4 percent of all US federal contracts last year. Matt Gardner, the executive director of the Institute on Taxation and Economic Policy stated that "The company has a history of using loopholes to lower its tax bill" and that its overall tax rate for the past five years was 0.5 percent.
Boeing disputes the report’s findings, stating its federal tax rate was actually 26.4 percent last year. Chaz Bickers, a Boeing spokesman, said the analysis ignored a crucial part of the company's tax expense. Boeing decided to embark on building a new aircraft, and its taxes were deferred to encourage investment that could take decades to materialise into a profit. Only when the project is delivered will those deferred taxes turn into current ones.
“Our current tax expense has been reduced somewhat in recent years by the very large investment we have made in American jobs, production facilities and research and development for our new aeroplanes - they are taxes that largely are deferred until we begin to deliver our new aeroplanes (and get the revenue back from our investment) in high volume at steady rates,” Bickers wrote in an email to The Huffington Post.
Gardner noted that Boeing was not alone in using corporate tax breaks to its advantage, and that they're doing nothing that's illegal in any way. In fact, Boeing is not known for engaging in some of the more notorious “creative accounting” practices, like moving profits offshore to avoid paying U.S. taxes on them. Still it was argued that the company’s sheer scale had allowed it to score some major tax concessions.
In 2013 Washington state gave Boeing what was believed to be the biggest state tax break in U.S. history. Lawmakers voted to give the company $8.7 billion in tax breaks through to 2040 in an effort to convince Boeing to locate a new, large manufacturing plant in the state.
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