WASHINGTON (Reuters) - Many brand-name U.S. companies are using deductions, credits and other means to shave their state tax rates below zero percent, a study by a left-leaning think tank released on Wednesday found.
Dupont and Intel Corp. are among the Fortune 500 companies that paid no net state income tax between 2008 and 2010, according to the Institute for Taxation and Economic Policy.
The study of 265 corporations that publicly disclose their state and local income taxes in financial reports found they paid state taxes, on average, of 3 percent on U.S. profits over the three year period.
The statutory average state corporate tax rate tops 6 percent.
Sixty-eight of the companies reviewed paid no state taxes in at least one of the years studied, the report found.
“Far too many have managed to shelter half or more of their profits from state taxes,” said Matthew Gardner, executive director of the group, which advocates eliminating many corporate tax breaks.
The group attributed the low average rates to trends among states to trim taxes paid in several ways, from new methods of calculating tax, to breaks in the name of luring business.
“It is fair to say that a lot of it is legal activity,” Gardner said. “We don’t know for sure the balance between the various causes of tax reduction.”
A Dupont spokeswoman said the chemicals group “complies with all tax laws and regulations in every jurisdiction in which it operates.”
A spokesman for Intel was not available for comment.
States are still recovering from the 2008 financial meltdown, when many legislatures slashed spending and temporarily raised taxes.
But a tide of conservative governors took over in 2010, though, and are pushing for big corporate tax breaks.
Major U.S. companies often gripe about the top statutory corporate rate on the federal level, which at 35 percent is among the highest in the world.
At the same time, companies pay vastly differing rates - depending on whether their industry enjoys big deductions and credits.