Even though Facebook reported $1.1 billion in pre-tax profits from U.S. operations in 2012, it will probably pay zero federal and state taxes — and even receive a federal tax refund of about $429 million — according to a Feb. 14 statement from Citizens for Tax Justice.
The tax-research and lobbying organization calls the footnotes in Facebook’s Jan. 30 financial statement “an amazing admission,” but there’s nothing illegal about the corporate tax breaks the company is claiming. Companies are allowed to treat the cost of non-cash compensation, such as stock options, as an expense that reduces profits, just like salaries.