Post by unlawflcombatnt on Apr 19, 2007 3:43:48 GMT -6
Apparently Wal-Mart, that paradigm of American "free" enterprise, ducked 1/2 it's taxes by claiming REIT deductions. Below are excerpts from the story titled Loophole Let Wal-Mart Evade $2.3B in Taxes, describing Wal-Marts mechanism of tax evasion.
by Michelle Chen
"Accusing a retail giant of wriggling out of over $2 billion in taxes, a watchdog group is pointing to a loophole in certain states that lets huge companies pay rent to themselves.
According to a new analysis of corporate and state financial data, from fiscal years 1999 to 2005, Wal-Mart paid some $2.4 billion in state income taxes, out of $77.4 billion in overall profits. But watchdog groups estimate the company would have owed about $2.3 billion more under state tax rates – calculated at about 6 percent of profits nationwide – suggesting Wal-Mart somehow shrugged off about half of its tax burden.
The report, released by the taxpayer-advocacy group Citizens for Tax Justice (CTJ) and the labor coalition Change to Win, attributes part of the tax gap to real-estate investment trusts (REIT). These trusts enable Wal-Mart and other multi-state companies to funnel money into a fund designated for property investments.
The REIT system has enabled Wal-Mart to effectively double as both landlord and tenant, recycling real-estate funds to itself and then deducting that cost from its tax bill. Court documents recently published by the Wall Street Journal show that Wal-Mart has used the REIT structure to set up the Delaware-based Wal-Mart Real Estate Business Trust, which is run by Wal-Mart employees...."
The entire article can be found at
Loophole Let Wal-Mart Evade $2.3B in Taxes
by Michelle Chen
"Accusing a retail giant of wriggling out of over $2 billion in taxes, a watchdog group is pointing to a loophole in certain states that lets huge companies pay rent to themselves.
According to a new analysis of corporate and state financial data, from fiscal years 1999 to 2005, Wal-Mart paid some $2.4 billion in state income taxes, out of $77.4 billion in overall profits. But watchdog groups estimate the company would have owed about $2.3 billion more under state tax rates – calculated at about 6 percent of profits nationwide – suggesting Wal-Mart somehow shrugged off about half of its tax burden.
The report, released by the taxpayer-advocacy group Citizens for Tax Justice (CTJ) and the labor coalition Change to Win, attributes part of the tax gap to real-estate investment trusts (REIT). These trusts enable Wal-Mart and other multi-state companies to funnel money into a fund designated for property investments.
The REIT system has enabled Wal-Mart to effectively double as both landlord and tenant, recycling real-estate funds to itself and then deducting that cost from its tax bill. Court documents recently published by the Wall Street Journal show that Wal-Mart has used the REIT structure to set up the Delaware-based Wal-Mart Real Estate Business Trust, which is run by Wal-Mart employees...."
The entire article can be found at
Loophole Let Wal-Mart Evade $2.3B in Taxes