The $16
billion tax deduction Facebook will receive when it goes public by using stock
options prompted Sen. Carl Levin (D-Mich.) to make another push for a
law eliminating such deductions.
Reiterating
the need for the Ending Excessive Corporate Deductions for Stock Options Act
(S. 1375), Levin said Facebook's pre-public offering filings show that the
company will no longer be paying taxes because of the stock options it is
providing founders and executives.
Facebook plans to capitalize on its massive deductions to create a
"net operating loss" -- a legal corporate bookkeeping maneuver under
which companies may use past financial losses to offset future taxable
income -- to reduce its taxes for years to come, Levin said in attacking
what he described as a gigantic tax loophole.
“Despite
trumpeting … revenue increases to investors, Facebook is planning at the same
time to tell Uncle Sam it has no taxable income, offsetting its revenues with
stock option tax deductions,” Levin said in a statement.
“Facebook's $16 billion stock option tax deduction is so huge, it will enable
Facebook to claim a $500 million refund of taxes paid over the prior two years
and wipe out this year's tax bill.”
Check back for updates regarding Senator Levin's bill.
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