Facebook have made $1.1 billion in profits since they've gone public, but they won't be paying any federal or state taxes on these profits. Better yet, the largest social network in the world will enjoy a very nice federal tax refund of around $429 million.
Before Facebook went public last year, Citizens for Tax Justice, a research group, said that this would happen, and have just released a breakdown of what the social network's crafty accounting skills have amounted to in their 2012 annual report. It all comes down to the tax deductibility on executive stock options, which Facebook gave plenty out of last year, with the deductible ended up actually being more than Facebook owed in taxes to the state, and federal governments.
This means that instead of Facebook having to pay anything to the government, the roles are reversed and the government will hand money over to Facebook - a refund nearing half a billion dollars. This refund comes from the taxes Facebook paid in 2010 and 2011. The good news doesn't stop for Facebook there, as they'll be carrying "forward another $2.17 billion in additional tax-option tax breaks for use in future years." This means that Facebook will, for as long as they can, continue to do this.
Not too bad for a social network that offers nearly everything for free.
Further Reading: Read and find more Business, Financial & Legal news at our Business, Financial & Legal news index page.