The more you make, the more Uncle Sam takes — most of the time.
If you’re one of the biggest companies in the U.S., you might even enjoy a negative tax rate.
That’s according to a recent analysis by the Center for American Progress, which took a look at publicly available investor filings of the largest American companies by revenue — the Fortune 100 — and identified the ones paying the least in taxes. It also noted “other large, notable companies pay similarly low rates.”
Here’s a look at the Fortune 100 companies paying the least in taxes in terms of their effective tax rate.
What is an effective tax rate?
In theory, corporations pay a federal income tax rate of 21%.
However, this figure applies only to their taxable income — meaning the portion of their income that is subject to federal income tax — not necessarily their total income.
The figure representing the amount companies pay in taxes as a percentage of their total income is called an “effective tax rate.” These are the actual tax rates being discussed here. Here’s how the Center for American Progress explains its calculation:
“The authors calculated effective tax rates by dividing the current U.S. federal income tax expense that a corporation reported to the SEC by its U.S. earnings before federal income tax (its U.S. pre-tax earnings minus its current state and local income tax expense).”
10. Bank of America Corp.
Company’s effective federal income tax rate: 3.5%
Bank of America, which reported $30.6 billion in U.S. earnings for 2021, paid only $1.1 billion in federal income taxes.
Add that to the list of reasons why Bank of America is Americans’ most hated bank.
9. ExxonMobil Corp.
Company’s effective federal income tax rate: 2.8%
ExxonMobil earned $9.3 billion in the U.S. for 2021 but paid just $262 million in federal income taxes.
The next time you’re filling up the tank, think about the few extra gallons you could get out of a million bucks or two. (More seriously, here are “7 Smart Ways to Save Money at the Gas Pump.”)
8. Chevron Corp.
Company’s effective federal income tax rate: 1.8%
Exxon’s not the only fuel company enjoying ultra-low taxes. Chevron earned a similar figure for 2021 — $9.5 billion — but paid even less in taxes, just $174 million.
7. MetLife Inc.
Company’s effective federal income tax rate: 1.3%
Insurance giant MetLife snatches its money away from Uncle Sam even quicker than the Peanuts’ Lucy pulls the football out from under Charlie Brown. It paid only $62 million in federal income taxes on $4.8 billion in U.S. earnings last year.
6. Ford Motor Co.
Company’s effective federal income tax rate: 1%
The automaker engineered its way to paying just $102 million in federal income taxes on $10 billion in U.S. earnings for 2021, according to the Center for American Progress.
5. General Motors Co.
Company’s effective federal income tax rate: 0.2%
GM didn’t make quite as much as Ford last year — $9.4 billion — but it beat Ford in at least one area, giving up only $20 million in federal income taxes.
4. Charter Communications Inc.
Company’s effective federal income tax rate: -0.2%
Broadband company Charter Communications (owner of Spectrum), along with the remaining companies on this list, managed a neat trick: Despite making billions last year, they managed to get tax refunds.
Charter reported $6 billion in earnings and netted a tax refund of $12 million.
3. American International Group Inc.
Company’s effective federal income tax rate: -2.2%
You might say insurer AIG, which you may recall received a pretty hefty federal bailout in 2008, is once again collecting from the American taxpayer. The company owed no federal income tax on $9.8 billion in earnings for 2021 and instead scored a tax refund of $216 million.
2. Dow Inc.
Company’s effective federal income tax rate: -3.1%
Chemical maker Dow concocted a $46 million refund on $1.5 billion in earnings for 2021. The first page of its annual report, titled “How Do We Deliver a Sustainable Future?” does not mention paying taxes in its answer.
1. AT&T Inc.
Company’s effective federal income tax rate: -4.1%
Most amazingly of all, the world’s largest telecommunications company, AT&T, reported an income tax benefit of $1.2 billion for its $29.6 billion in 2021 earnings.
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