Chesapeake Paid Almost No Income Taxes On $5.5 Billion In Profits
One scandal-ridden company has managed to essentially avoid paying U.S. income taxes for more than two decades.
Since its founding 23 years ago, Chesapeake has paid about 1 percent in taxes of its $5.5 billion in pretax profits, Bloomberg reports. Because of the risk that oil and gas companies could drill into a well that ends up being dry, they are allowed a loophole to stave off paying taxes on a large percentage of income. Less than a single percent of Chesapeake’s wells turned up dry last year.
Still, Chesapeake isn’t the only major company to use a loophole in an aim to lower its tax bill. Thirty of America’s most profitable companies paid nothing in income taxes over the last three years, according to a November report from the Citizens for Tax Justice. In addition, nearly 300 companies paid an average tax rate of 18.5 percent between 2008 and 2010. The U.S. corporate tax rate is technically 35 percent.
Major companies have found some creative ways to pay less in taxes. Some, including Apple, Google, JPMorgan Chase and Bank of America, are using one building in Delaware as their legal address in an aim to take advantage of the state’s corporate-friendly laws. More than half of America’s public corporations are incorporated in Delaware.