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Close Tax Loopholes
Florida Could Recover $1.1 Billion Lost to Corporate Tax Loopholes
Every year, corporations use complicated schemes to shift U.S. earnings to subsidiaries in offshore tax havens which helps them dodge both state and federal taxes. Reforms to end tax dodging in Florida would reduce revenue loss by $1.1 Billion, according to a new report called “A Simple Fix for a $17 Billion Loophole,” released by Florida Consumer Action Network Foundation (FCAN Foundation.)
“When multinational businesses dodge hundreds of millions in Florida taxes, that money doesn’t come out of a hat. It means either means we have less money for public priorities like education or transportation or other taxpayers end up footing the bill,” said Bill Newton, deputy director of FCAN Foundation, which released the report. “Luckily, there are ways for Florida to even the playing field, and recover millions for critical services without raising rates.”
For years, some corporations that do business here in Florida have dodged taxes by booking profits made in America to tax havens like the Cayman Islands, that levy little to no tax. The report, which was co-authored by US PIRG Education Fund, the Institute on Taxation and Economic Policy (ITEP), SalesFactor.org and the American Sustainable Business Council (ASBC), looks at approaches Florida can take to address this offshore tax dodging.
States have the power to use a global picture of a company’s activities in order to determine how many tax dollars a state rightfully should receive. A Simple Fix details how much money each state would recover if it required companies to follow one or more standard procedures, including domestic combined reporting, tax haven list reform and worldwide combined reporting -- otherwise known as complete reporting.
Combined reporting (used already by 27 states and Washington, DC) applies a formula to the total domestic business of a company to determine how much income a company should attribute to the state, instead of letting the company decide unilaterally how to allocate its profits (which incentivizes shifting money to low-tax jurisdictions).
Complete reporting expands the combined reporting to include the company’s entire global business in order to close loopholes that allow corporations to hide profits offshore.
Download releases and files here:
FCANF Press Release - Close Corporate Tax Loopholes PDF
FCANF Release - Close FL Corporate Tax Loopholes Word Version
Executive Summary - A Simple Fix - FL Corporate Tax Loopholes PDF version
Full Report A Simple Fix - FL Corporate Tax Loopholes PDF