Stamford-based Charter Communications, the owner of Spectrum internet, television, and phone services, paid nothing in federal income taxes on 2020 earnings of $3.68 billion, according to a new study from the nonprofit Institute on Taxation and Economic Policy.
After reviewing the telecommunications giant’s financial reports, ITEP analysts calculated that the company’s effective federal tax rate was -0.2% for last year.
“As a result of legacy net operating losses, Charter’s tax burden was decreased,” company officials said in a statement. “Our investments in technology and infrastructure — which total nearly $40 billion over the past five years alone — also resulted in a decreased tax burden, as well as taxes being deferred for future payment. Charter does currently pay income tax in most state and local jurisdictions. Charter expects to be a meaningful federal cash taxpayer in 2022.”
Charter Communications received a 10-year loan of $6.5 million from the state Department of Economic and Community Development in 2012 after announcing plans to relocate its central offices from St. Louis, Missouri, to Stamford. It received another loan, this time for $10 million, through the state’s First Five Plus program in 2017 as work on a new, 500,000-square-foot headquarters on Washington Boulevard got underway.
Charter Communications was one of 55 large companies identified by ITEP as having paid no federal income taxes on profits in the most recent fiscal year. Also making appearances on the institute’s list were Nike, FedEx, HP, Dish Network, Salesforce, Archer Daniels Midland, Duke Energy, Consolidated Edison, Textron, and Booz Allen Hamilton, among dozens of other Fortune 500 and S&P 500 firms.
If all 55 corporations had paid the statutory federal tax rate on profits —21%— their combined tax bill would have amounted to about $8.5 billion, researchers found. Instead, those companies received $3.5 billion in rebates.
According to the study, businesses with the resources to scour the federal tax code for loopholes and breaks are taking advantage of both longstanding write-offs and credits and more recently, corporate-friendly provisions folded into the 2017 Tax Cuts and Jobs Act to push their tax expenses down to zero.
Researchers also pointed to the 2020 Coronavirus Aid, Relief and Economic Security Act, which allows companies to “carry back” losses as far as five years to offset profits, making them eligible for rebates.
