Posted in: Social Media

Facebook Gets $429 Million Tax Refund

Facebook Getting Huge Tax Refund

Based on a report from Citizens for Tax Justice (CTJ), Facebook will receive a $429 million tax refund this year.

With over one billion users worldwide, the company reported nearly $1.1 billion in pre-tax profits from 2012. The refunds are mainly due to the company’s use of a single tax break — tax deductibility of executive stock options — which reduced Facebook’s federal and state income taxes by $1.033 billion in 2012.

According to Bloomberg Businessweek, the company said that it anticipates reducing its future tax liability by an additional $2.17 billion with net operating loss carry-forwards that it collected.

Ashley Zandy, Facebook spokeswoman, wouldn’t comment on the tax break but did point out a transcript of a Facebook executives’ conference call with analysts in which CFO David Ebersman mentioned the accumulated tax benefits and said that the company ended its fiscal year with almost $10 billion in cash and investments.

CTJ said the tax footnotes in Facebook‘s January 30 financial statement aren’t illegal. Many large corporations give their executives options to buy company stock at a discounted price in the future. When exercised, corporations can take a deduction for the difference between what employees originally paid for the stock and what it’s currently worth. Basically, the business is treating the cost of non-cash compensations, like stock options, as a profit-reducing expense.

Facebook’s announcement of the $429 million refund comes only a few days after the social network giant confirmed that it was a victim of a “sophisticated attack” by hackers during the month of January. The company said that “there is no evidence to the fact that users’ data have been compromised.”

Articles And Offers From The Web


5 Responses to “Facebook Gets $429 Million Tax Refund”

  1. Julie StClair Gurin

    I am glad the govt needed an extra $26 from all of my husbands paychecks (which as a family of four leaves us below "poverty" level).

Around The Web