Uncle Sam is the only one to enjoy tax season more than accountants, especially when receiving tax returns from the nation’s biggest companies. Every year, tax returns pour in from Corporate America in a somewhat controversial manner. Some advocates argue that large companies need to pay more taxes to satisfy their fair share, while others contend that the corporate tax rate is already one of the highest in the world. Either way, Uncle Sam has some big checks to cash.
The average company in the S&P 500 continues to pay a higher nominal amount of income taxes, but the tax rate remains relatively stable. According to new research from FactSet, S&P 500 companies with a fiscal year ending between March 2014 and February 2015 paid an average of $866.1 million in annual income taxes. That is up from $849.6 million a year earlier and well above the five-year average of $799.1 million. However, as the chart above shows, the average tax rate currently stands at 28.1%, down from the previous year but in line with the five-year average of 28.7%.
Let’s take a look at the five S&P 500 members with the largest income tax bills, using five-year averages from FactSet.
The world’s largest retailer consistently finds itself in the crosshairs for low wages, but carries the fifth largest tax bill in the S&P 500. Over the past five years, Wal-Mart has logged an average income tax bill of $7.9 billion, placing it slightly ahead of JPMorgan Chase and ConocoPhillips. Last year, Wal-Mart paid about $8 billion in income taxes.
4. Wells Fargo
America’s most profitable bank is no stranger to Uncle Sam. Wells Fargo has paid an average of $8.7 billion annually in income taxes over the past five years. Surprisingly, Wells Fargo is the only bank to crack the top five. Last year, Wells Fargo paid $10.3 billion in income taxes.
Apple holds several records for the best quarterly earnings in market history, which has Uncle Sam smiling. While it’s tax practices have come under scrutiny in recent years, thanks to the U.S. tax code and incentives offered by other countries, Apple paid an average of $10.8 billion annually in income taxes over the past five years. In comparison, Microsoft and IBM rank ninth and tenth on the list at $5.5 billion and $4.5 billion, respectively.
Oil companies make a lot of money and hand over a lot of money. Chevron ranks second on the list with an average income tax bill of $15.9 billion over the past five years. However, this average could easily decrease with the rapid decline in oil prices. In 2014, Chevron paid $11.9 billion in income taxes.
1. Exxon Mobil
Exxon Mobil, the second-largest company in the S&P 500 based on market capitalization, has the highest average income tax bill over the past five years at $25.2 billion. As with Chevron, Exxon Mobil’s tax liability has declined along with oil prices. In 2014, the oil giant paid $18 billion in income taxes.
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