US Corporations Reject CTJ State Income Tax Findings

by Mike Godfrey, Tax-News.com, Washington

07 February 2005

US corporations have rejected as incorrect the conclusions of a study released by pressure group Citizens for Tax Justice, which has claimed that more than 250 America’s top firms are failing to make adequate state corporate income tax contributions.

The CTJ study calculated that by 2003, some 252 companies had reduced their state income tax payments to an average of 2.3% of their US profits, which compares to an average statutory state corporate tax rate of around 6.8%, resulting in a decline in the total contribution of state corporate income taxes to the economy of almost 40% since 1989.

However, according to Dow Jones Newswires, Merrill Lynch & Co. and Lexmark International Inc, two firms reportedly singled out as major culprits in the study, refuted the CTJ’s conclusions.

"The study is absolutely incorrect as it relates to Merrill Lynch," remarked company spokesman Bill Halldin, dismissing the allegation that the firm paid no state income tax from 2001 through 2003 despite reporting profits in those periods.

"We paid state and local taxes in each of the three years referenced," stated Mr Halldin.

Meanwhile, a Lexmark spokeswoman explained that the firm had paid $15 million in state corporate income taxes during the same period, in addition to a number of other taxes such as state and local property, payroll, insurance and sales tax.

"Lexmark is committed to complying with all tax laws in every jurisdiction around the world where we do business," the spokeswoman stated.

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