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The more you make, the more Uncle Sam takes — most of the time.
If you’re one of the biggest companies in the U.S., you might even enjoy a negative tax rate.
That’s according to aby the Center for American Progress, which took a look at publicly available investor filings of the largest American companies by revenue — the Fortune 100 — and identified the ones paying the least in taxes. It also noted “other large, notable companies pay similarly low rates.”
Here’s a look at the Fortune 100 companies paying the least in taxes in terms of their effective tax rate.
What is an effective tax rate?
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In theory, corporations pay a federal income tax rate of 21%.
However, this figure applies only to their taxable income — meaning the portion of their income that is subject to federal income tax — not necessarily their total income.
The figure representing the amount companies pay in taxes as a percentage of their total income is called an “effective tax rate.” These are the actual tax rates being discussed here. Here’s how the Center for American Progress explains its calculation:
“The authors calculated effective tax rates by dividing the current U.S. federal income tax expense that a corporation reported to the SEC by its U.S. earnings before federal income tax (its U.S. pre-tax earnings minus its current state and local income tax expense).”
10. Bank of America Corp.
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Company’s effective federal income tax rate: 3.5%
Bank of America, which reported $30.6 billion in U.S. earnings for 2021, paid only $1.1 billion in federal income taxes.
Add that to the list of reasons why Bank of America is Americans’ most hated bank.
9. ExxonMobil Corp.
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Company’s effective federal income tax rate: 2.8%
ExxonMobil earned $9.3 billion in the U.S. for 2021 but paid just $262 million in federal income taxes.
The next time you’re filling up the tank, think about the few extra gallons you could get out of a million bucks or two. (More seriously, here are “7 Smart Ways to Save Money at the Gas Pump.”)
8. Chevron Corp.
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Company’s effective …….