WASHINGTON – More than 100 large profitable companies reported paying no current federal corporate income tax in 2025, while hundreds of others paid rates well below the statutory 21%, according to an analysis of public financial filings.
The Institute on Taxation and Economic Policy examined 706 profitable corporations and calculated an average current federal income tax rate of 10.4%. The progressive research group said it was the lowest effective rate documented in more than four decades of its corporate-tax studies.
Of the companies reviewed, 114 reported no current federal income tax for the year, and more than 250 paid effective rates below 7%. Tesla, Disney, United Airlines and DoorDash were among the companies in the zero-tax group, according to the report.
The findings require context. ITEP relied on annual reports filed with the Securities and Exchange Commission, not confidential returns filed with the Internal Revenue Service. A company’s current tax expense in a financial statement may differ from its final cash payment because of timing rules, deferred taxes, credits and other accounting adjustments.
Paying less than the statutory rate is not by itself evidence that a company violated tax law. Congress deliberately created deductions and credits to encourage activities such as domestic investment, research, equipment purchases and clean-energy development.
ITEP estimated that the 706 companies received a combined $198 billion in what it calls corporate tax subsidies, measured as the difference between taxes at the 21% statutory rate and the amount reflected in their current federal tax expense.
The report argued that the greatest effect on federal revenue did not come from the 114 companies reporting no current tax. Instead, it came from highly profitable corporations that paid reduced rates, because even a modest percentage-point reduction can be worth billions of dollars on very large earnings.
Alphabet, Microsoft, Amazon and Meta received an estimated $46 billion in combined savings tied largely to immediate research-and-development expensing and bonus depreciation, ITEP found. Those provisions allow companies to deduct qualifying costs more quickly rather than spreading deductions across several years.
Fortune reported that federal corporate income-tax collections fell about 15%, or $70 billion, to $381 billion in the fiscal year that ended Sept. 30, based on Treasury Department data. Corporate profits, meanwhile, reached a record $4.7 trillion over the 12 months ending in mid-2026, according to government data cited by Reuters.
Critics of the tax breaks say lower collections add to federal deficits and shift more of the cost of government to workers and smaller businesses. They also question whether deductions meant to reward experimentation are being applied to routine construction and equipment costs for artificial-intelligence data centers.
Supporters argue that research credits and accelerated depreciation encourage companies to build facilities, develop technology and create jobs in the United States. Adam Michel of the libertarian Cato Institute has said lists of companies using legal deductions do not demonstrate a scandal and that many of the policies have bipartisan roots.
Meta defended its use of research incentives, telling Fortune that AI-optimized data centers require extensive testing and experimentation that cannot be simulated. Democratic senators have requested details about how the company’s claimed research differs from ordinary data-center investment.
The debate is likely to continue in Congress because recent tax legislation made several business provisions permanent. Changes would affect federal revenue, investment decisions and the projected deficit, which the Congressional Budget Office has estimated will grow by trillions of dollars over the next decade under current policies.
Source: Fortune, published Oct. 30, 2026. Additional verification: Institute on Taxation and Economic Policy’s 2025 corporate-tax analysis, Treasury fiscal data and Congressional Budget Office estimates.
