You are hereHome >
In the news
A Georgia consumer group claims the state lost $569 million in corporate income taxes in 2011 from companies using offshore tax havens.
In a study released Tuesday, Georgia Public Interest Research Group Education Fund said “states automatically lose billions of dollars in revenue each year simply because their tax codes are closely linked to federal tax codes. When multinational firms shift the reporting of profits offshore on their federal taxes, those profits go un- reported for state tax purposes too.”
The report called for state-level policymakers to make a change.
Georgia PIRG is a consumer group that says it stands up to powerful interests. One of its top priorities is closing what it says are corporate tax loopholes.
The issue of large corporations using offshore havens to avoid paying federal and state taxes has recently been making headlines.
U.S. Senator Carl Levin (D-Mich.) held hearings last year on multinational corporations that he says “have taken advantage of loopholes in tax law and weaknesses in enforcement to shift their profits overseas and avoid paying taxes.”
The Wall Street Journal reported Jan. 22 that up to $1.7 trillion that American companies say they have invested overseas could actually be lying in American banks, in U.S. dollars.
Several of Georgia’s largest corporations have “undistributed earnings” in their foreign subsidiaries that have not been taxed. Leading the pack is The Coca-Cola Co. (NYSE: KO), which had $23.5 billion overseas at the end of 2011, according to its annual report filed last year with the Securities and Exchange Commission. No U.S. federal or state taxes were paid on these earnings.
“It is legal for them to do that. From a shareholder’s point of view, it could be advantageous to avoid taxes and have a positive share price. But of course, it means some of their earnings are attributable to activity in the U.S. they should be paying taxes,” said Laura Wheeler, senior research associate at the Fiscal Research Center at Georgia State University.
Coca-Cola is the only Georgia company cited in the Georgia PIRG study.
“Even if Coca-Cola paid these taxes, it is still apportioned to every state. So it’s not that Georgia would get 6 percent of the entire earnings. The earnings are split between all the states they do business in,” added Wheeler.
Other Georgia giants with large amounts of “undistributed earnings” held overseas include United Parcel Service Inc. (NYSE: UPS), with $3.2 billion at the end of 2011; The Home Depot Inc. (NYSE: HD), with $2.4 billion; and Duluth, Ga.-based agricultural equipment maker AGCO Corp. (NYSE: AGCO), with $2.7 billion as of December 2011.
Your donation supports Georgia PIRG’s work to stand up for consumers on the issues that matter, especially when powerful interests are blocking progress.