You can be on Entrepreneur’s cover!

Nike, HP and Other Large Corporations Got Away With Not Paying Any Federal Taxes on Their 2020 Profits At least 55 of America's largest companies avoided federal taxation last year by using certain tax breaks, some of which had been revived during the pandemic.

By Justin Chan

entrepreneur daily

As many as 55 of the U.S.' largest corporations did not pay any federal taxes on their 2020 profits, according to the Institute on Tax and Economic Policy (ITEP).

The companies, which include Con Edison, Dish Network, FedEx, HP, Nike and Salesforce, reportedly made almost $40.5 billion combined in U.S. pretax income last year. Because of tax breaks under the 2017 Tax Cuts and Jobs Act (TCJA) and the 2020 CARES Act, they have been able to avoid federal income taxation for years, ITEP's report points out. Had the corporations paid the 21% federal tax rate for corporate profits, they would have shelled out $8.5 billion, it further adds.

The news comes as millions of Americans struggle to make ends meet during the pandemic. According to the U.S. Labor Bureau of Statistics, approximately 10 million people remain unemployed even as the national economy trends upwards.

Related: 75 Items You May Be Able to Deduct from Your Taxes

The ITEP study also found that federal tax avoidance among the companies "remained rampant" between 2008 and 2015 — well before the TCJA's passage. Last year, more than a dozen of them, including Nike and Salesforce, allegedly used a tax break for executive stock options to reduce their income taxes. Nike, along with others like HP, also used federal research and experimentation credit to lower their taxes.

In fact, a number of companies received a combined $3.5 billion in tax rebates instead of paying federal taxes, the findings assert. Rather than paying anything on its nearly $2.9 billion of U.S. pretax income last year, Nike, for instance, recieved a $109 million tax rebate. FedEx also didn't pay any taxes on its $1.2 billion of U.S. pretax income and received a $230 million rebate.

As ITEP notes, the CARES Act temporarily restored the companies' ability to carry back losses — including those from as far as five years ago — and offset income taxed at the 35% tax rate that had been in effect before 2018. As a result, the 55 corporations that ITEP surveyed enjoyed more than $500 million of tax breaks alone from CARES' temporary tax benefit, along with other perks, last year.

Justin Chan

Entrepreneur Staff

News Writer

Justin Chan is a news writer at Entrepreneur.com. Previously, he was a trending news editor at Verizon Media, where he covered entrepreneurship, lifestyle, pop culture, and tech. He was also an assistant web editor at Architectural Record, where he wrote on architecture, travel, and design. Chan has additionally written for Forbes, Reader's Digest, Time Out New YorkHuffPost, Complex, and Mic. He is a 2013 graduate of Columbia Journalism School, where he studied magazine journalism. Follow him on Twitter at @jchan1109.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

Walmart Shoppers May Be Eligible for $500 After Settlement

Walmart shoppers who purchased weighted goods or bagged citrus in the U.S. or Puerto Rico from late 2018 through early 2024 might be eligible for a share of a $45 million settlement.

Business News

A Non-Profit Newspaper Published a Column Criticizing Facebook. Then Meta Blocked All of Its Posts.

Facebook's communications chief said that the posts were removed because of "a mistaken security issue."

Business News

A Look Inside the Company That Is Making $500 Million a Year Serving Italian Beef Sandwiches Made Famous by 'The Bear'

Portillo's CEO Michael Osanloo shares his secret to keeping hungry customers coming back again and again. (Hint: It requires a lot of napkins.)

Business News

Total Solar Eclipse 2024 Live Feed: Where, When and How to Watch the 2024 Eclipse

Here's what to know about the total eclipse 2024 and a live stream from NASA.

Business News

Elon Musk Reveals When Tesla Will Release Its First Robotaxi

Tesla's CEO says the fully autonomous Tesla taxi is arriving soon — in 122 days.

Living

Use This Simple Strategy to Push Through Limitations in Your Life

On this episode of "The Jeff Fenster Show," guests Chris and Lori Harder share tactics that can help anyone overcome personal and career obstacles.