December 19, 2012

The Ledger: Publix Underpays Taxes

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(Original Post)

By Kyle Kennedy

THE LEDGER

Published: Wednesday, December 7, 2011 at 11:13 p.m.
Last Modified: Wednesday, December 7, 2011 at 11:13 p.m.

LAKELAND | A report says Publix Super Markets Inc. and seven other large Florida-based companies are among 265 “consistently profitable” firms that underpay corporate taxes owed to states.
Facts

Three think tanks, including the Tallahassee-based Florida Center for Fiscal and Economic Policy and two Washington, D.C. organizations, made the claims Wednesday. The report covers three years through 2010 and is based on corporations’ annual reports.

The document’s authors say they were not able to determine specific tax amounts paid by corporations to individual states. But they note the average state corporate tax is 6.2 percent and each Florida company cited paid less than 4 percent. Florida’s rate is 5.5 percent.

Lakeland-based Publix paid $215 million in taxes on $5.5 billion in profits during the 2008-2010 period, for an average tax rate of 3.9 percent, the report states.

Publix spokeswoman Maria Brous said the company’s tax rate reflects special deductions allowed by the government to encourage investment growth and domestic manufacturing. She also said Publix receives special deductions for donating food to organizations that support the needy and the elderly.

“So we are doing many things the state is encouraging and getting a deduction for it, just like you get when you personally make a charitable contribution or invest in a home,” Brous told The Ledger.

Matt Gardner is the executive director of the Washington, D.C.-based Institute on Taxation and Economic Policy, which helped produce the report. He said Publix and other firms cited in the document appear to have valid reasons for paying lower tax rates, but argues whether lawmakers should allow that to happen.

“The underlying problem is that state governments and the federal government have enacted a huge variety of often conflicting and ineffective tax breaks that reward a lot of different companies for doing a lot of different things,” Gardner said. “There are troubling questions about the overall impact of these tax breaks collectively on state tax systems.”

The 265 Fortune 500 companies cited in the report cost states nearly $43 billion in lost revenues from 2008 through 2010, Gardner said. Collectively, the firms made $1.3 trillion in profits during the same period.

“That’s really a big hole in state budgets … at a time when state governments nationwide and especially in Florida are facing difficult questions about how to balance budgets, whether it’s through damaging spending cuts or tax increases,” Gardner said.

In addition to Publix, the Florida companies listed in the report include NextEra Energy Inc., the parent company of Florida Power & Light Co.; Ryder System, Tech Data, CSX, Harris Corp., Health Management Associates and Darden Restaurants.



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