Behind Facebook’s tax bill
@CNNMoney February 22, 2013: 7:12 AM ET
A tax advocacy group says Facebook, which made $1 billion in U.S. profit before taxes last year, will pay no U.S. income tax for 2012.
Tax experts say that could possibly be true — and if so, it’s perfectly legal — but it’s only part of the story. At issue is a sizable tax deduction from stock options that Facebook issued to its employees.
Stock options, like regular cash salaries, are tax-deductible for companies. Companies can use those deductions to offset their profits, and apply those losses to previous years, too. That’s how a company could even be eligible for a refund in a year when it made money.
Citizens for Tax Justice, the advocacy group, says Facebook ( will receive a tax refund of nearly $430 million as a result of those options. )
(Is this pay for government use of Facebook as a surveillance system on it’s citizens? Editor)