In its just-released annual report, Boeing Company reported that it claimed $82 million in federal tax refunds, despite reporting $5.9 billion in U.S. pre-tax profits last year. This represents an effective tax rate of -1.4 percent. Boeing paid just $11 million in state income taxes, an effective state tax rate of just 0.2 percent. The disclosures were made in Boeing’s Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) last Friday.
Since 2008, Boeing has reported between $1.6 billion and $5.9 billion in profits each year, yet has paid no federal income taxes in three of those years. Over the last six years, Boeing has reported $26.4 billion in pre-tax profits to its shareholders, while claiming a total of $105 million in refunds from the IRS, an effective tax rate of -0.4 percent.
With $20 billion in sales to the federal government in fiscal 2013, Boeing was the nation’s second largest contractor. Boeing alone received 4.4 percent of all federal government contracts last year. Boeing reported to shareholders that 34 percent of its 2013 sales were made to the U.S. government.
Boeing’s CEO, W. James McNerney, Jr., received total compensation of $27.5 million in 2012, according to the company’s proxy statement filed with the SEC. Information on McNerney’s 2013 pay will be revealed when the company files its new proxy statement next month.
When any large corporation makes tens of billions of profits and pays nothing in taxes, it is scandalous. When a company that draws its lifeblood from taxpayer-funded contracts pays nothing to support the government it claims to serve, it is time to change the rules that allow such behavior to continue unchecked.
Editor's Note: Responding to the Anonymous commenter, Boeing’s current taxes paid are reported in the tax footnote of its Form 10-K. In its income statement it reports income taxes paid, which include “deferred taxes”, which as the name implies are taxes that Boeing did not pay in the current year, but which may be paid at some future date. Deferred taxes do not pay the government’s bills. If Boeing delivered an aircraft to the federal government and the Defense Department told Boeing that it was deferring payment years into the future, Boeing would not have much of a business. When deferred taxes are eventually paid, they show up in the current taxes line and will raise the effective tax rate in that year.
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