Salesforce paid zero to IRS in 2020 after making $2.6 billion
Salesforce, San Francisco’s largest private employer, was among 55 major U.S. companies that paid no federal income taxes in 2020, according to a new report.
The cloud computing giant had $2.6 billion in net income in its 2021 fiscal year ending on Jan. 31, according to Securities and Exchange Commission filings. Instead of paying around half a billion dollars in taxes — based on the corporate tax rate of 21% — the company is receiving a $12 million refund, according to the Institute for Tax and Economic Policy, a nonpartisan think tank that issued the report.
Salesforce had no net tax liability over the last three years, with a net effective tax rate of 0.1%, according to the institute. FedEx and Palo Altobased HewlettPackard were some of the other companies that didn’t pay federal taxes.
The institute said Salesforce benefited from writing off executive stockoptionrelated expenses. Sunnyvale semiconductor company Advanced Micro Devices and Nike also used the practice and paid zero in taxes, according to the report.
Salesforce has over 10,000 employees in San Francisco and is the city’s largest private employer. The company declined to comment.
Other tax benefits used by companies included research and experimentation credits, renewable energy credits and companies writing off capital investments.
Salesforce CEO Marc
Benioff was a champion of a 2018 San Francisco tax measure, Proposition C, which he said would increase the company’s annual taxes by $10 million to $12 million, which he described as an insignificant amount.
The measure, to fund housing and homelessness services, passed a year after the Trump administration and Congress cut corporate income taxes from 35% to 21%, which benefited Salesforce and many other companies.
Salesforce told Wired
magazine in 2019 that it did not take a position on the federal tax cuts and that it lobbied on two minor items.
The company previously said it has contributed over $150 million to Bay Area philanthropic efforts, including in education, homelessness, small business assistance and workforce training initiatives.