Earlier this year, Facebook Inc. released its first “10-K” annual financial report since going public. Hidden in the report’s footnotes is an amazing admission: despite $1.1 billion in U.S. profits in 2012,
Facebook did not pay a single dime in federal and state income taxes. In fact, Facebook states it will receive net tax refunds totaling $429 million.
Facebook’s income tax refunds stem from the company’s use of a single tax break, the
tax deductibility of executive stock options. That tax break reduced Facebook’s federal and state income taxes by $1,033 million in 2012, including refunds of earlier years’ taxes of $451 million.
