Facebook Tax Loophole Draws Fire
Newly public technology titan. Cultural icon. Tax-dodger? Even as Facebook (FB) today lifted the curtain on its initial public offering, the Internet company is already being accused of seeking to avoid paying its fair share in taxes.
On the eve of Facebook’s stock offering, Sen. Carl Levin, D, Mich., said Thursday that the social networking firm plans to claim tax deductions worth $16 billion, or the same sum the company raised in the IPO. A Facebook regulatory filing confirmed that the company intends to take the huge deduction. That would enable Facebook to collect a $500 million tax refund spanning the last two years and effectively zero out its 2012 tax bill, the Michigan Democrat said in remarks from the Senate floor.
Facebook also plans to capitalize on its massive deductions to create a “net operating loss” — a legal corporate bookkeeping maneuver under which companies may use past financial losses to offset future taxable income — to reduce its taxes for years to come, Levin said in attacking what he described as a gigantic tax loophole. Facebook did not immediately respond to a request for comment.