Business Notes Companies

The federal tax bite for corporations is 46% on income above $100,000. But tax payments are something else again. Last year 40 large U.S. companies, which had total profits of $10 billion, did not pay one cent in corporate income tax. In fact, 129 of 275 firms paid no taxes in at least one of the last four years. Those were the findings of a report issued last week by Citizens for Tax Justice, a Washington research and lobbying group supported by labor unions, churches and public-interest lawyers. Among the artful tax dodgers: Boeing, Pepsico, TransAmerica, Greyhound, Grumman and Lockheed. The companies did nothing illegal. They simply applied every loophole, exemption and credit available.

So sharp were the accountants' pencils that 26 of the companies got refunds of taxes paid in previous years. The largest of them went to American Telephone and Telegraph. The company earned profits of $1.9 billion last year. But thanks to a combination of investment tax credits and tax deferrals adding up to $1 billion, plus other unusual expenses involved in the breakup of the phone company, AT&T's tax liability was wiped out. In fact, the company got a tax refund of $241.6 million.