Salesforce, the largest private employer in San Francisco, was among the 55 major American companies that did not pay federal income tax in 2020, according to a new report.
The cloud computing giant had net revenue of $ 2.6 billion in its fiscal year 2021 ended January 31, according to the files of the Securities and Exchange Commission. Instead of paying about half a billion dollars in taxes – based on the corporate tax rate of 21% – the company is receiving a refund of $ 12 million, according to the Institute for Fiscal and Economic Policy, a think tank who published the report.
Salesforce has had no net tax liabilities in the past three years, with an effective tax rate of -0.1%, according to the institute. FedEx and Hewlett-Packard, based in Palo Alto, were some of the other companies that did not pay federal taxes.
The institute said Salesforce benefited from lower executive expenses related to stock options. Semiconductor company Advanced Micro Devices from Sunnyvale and Nike also used the practice and paid zero taxes, according to the report.
Salesforce has more than 10,000 employees in San Francisco and is the largest private employer in the city. The company declined to comment.
Other tax benefits used by companies include research and experimentation credits, renewable energy credits and companies that cancel capital investments.
Salesforce CEO Marc Benioff was the 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 finance housing and homeless services, was passed a year after the Trump administration and Congress cut corporate income tax from 35% to 21%, which benefited Salesforce and many other companies.
Salesforce told Wired magazine in 2019 that it took no position on federal tax cuts and lobbied on two smaller items.
The company previously said it has contributed more than $ 150 million to the Bay Area’s philanthropic efforts, including education, homelessness, assistance to small businesses and workforce training initiatives.
Roland Li is a writer for the San Francisco Chronicle. Email: [email protected] Twitter: @rolandlisf