Tax Rebates & Refunds

Facebook to receive $429 million tax rebate this year

February 17, 2013
Posted in Tax Rebates — Written by Chris

According to Citizens for Tax Justice, an advocacy group focusing on tax policy in the U.S., the company behind the internationally successful social networking platform Facebook will receive a tax rebate of $429 million this year. This is despite making more than $1.1 billion in profit.

Citizens for Tax Justice analysed Facebook’s public filings with the U.S. Securities and Exchange Commission (SEC) and found that all the savings the company will make come from a single tax deduction consisting of executive stock options.

This means that Facebook, like many other large companies and corporations, will issue options to its employees allowing them to purchase shares in the company. Workers can buy the shares at a later date, but will get them at the price offered on the date the stock options were issued.

This option allows companies such as Facebook to take the difference between what employees pay for the shares and the current price of the stock. This sum is deducted on the company’s tax returns and will be issued as a tax rebate.

The non-profit organisation estimated that in 2012, making use of this tax break reduced federal and state taxes for Facebook by a huge $1,033 million.

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