$0 taxes! 13 big companies slip the taxman

U.S. companies are figuring out all sorts of way to cut their taxes, including buying companies in countries with low taxes.

But there are 13 profitable companies in the Standard & Poor's 500, including hard drive maker Seagate Technology (STX), video game maker Electronic Arts (EA), automaker General Motors (GM) and food processor Mondelez International (MDLZ) that paid 0% or less effective tax rates in the first calendar quarter, according to a USA TODAY analysis of data from S&P Capital IQ. Property real-estate investment trusts were excluded due to their "pass-through" taxation structures.

It's just another reminder that while U.S. tax rates might be higher than other countries, U.S. companies are able to find ways to cut their tax bills.

Take the example of Seagate Technologies, the maker of digital computer storage equipment. The company actually booked an income tax benefit of $5 million during the first calendar quarter, despite reporting earnings before taxes of $1.6 billion. The company moved its headquarters to Ireland in 2010, in large part to take advantage of tax benefits. But the company said it was able to keep taxes below even the 25% Irish statutory rate by taking advantage of tax benefits in regions that "tax incentive programs," in addition to releasing tax reserves to audit settlements.

Similarly, Electronic Arts has also been able to outmaneuver Uncle Sam and report a tax benefit of $30 million during the first calendar quarter, says S&P Capital IQ, by releasing deferred tax assets. That tax reserve allowed the company to bring $700 million in cash held overseas in the first quarter of 2014 without triggering a tax hit.

General Motors said it got a $224 million tax benefit thanks to deductions for stock investments it made in affiliates not based in the U.S. And Mondelez reported a quarterly effect tax benefit of $27 million, which the company said was due to "discrete one-time events" connected with a reduction in pre-tax income from extinguishing debt and a reassess of Venezuela monetary assets.

Some of these companies may have just enjoyed a one-time break from Uncle Sam, but many are still finding ways to keep their tax rate well below the U.S. statutory rate. Mondelez, for instance, said it expects its effective tax rate this year to be 20.1%, largely due to getting so much income in non-U.S. tax jurisdictions.

It's just the first quarter, true, so there are accounting timing issues to consider. But still, the quarter gives a good look at how companies are able to take advantage of tax benefits. The question is how many will be able to keep finding such benefits to hold their tax rates down.

Below are the 13 companies in the S&P 500 that were profitable but had effective tax rates of less than 0% in the first calendar quarter:



Effective tax rate, Q1 2014

General Motors



Best Buy






Dun & Bradstreet



Cablevision Systems









Edison Int'l



Electronic Arts



Host Hotels & Resorts



Newell Rubbermaid



Seagate Tech






Source: S&P Capital IQ, USA TODAY


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