BackCiti, Motorola among top tax payers in US
Citi, Motorola among top tax payers in US
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New York: The economic downturn has brought in heavy losses for them, but Citigroup and Motorola -- two American corporate giants led by India-born CEOs -- also rank among the biggest contributors to Uncle Sam’s tax kitty.
In a list compiled by US magazine BusinessWeek, Vikram Pandit-led banking behemoth Citigroup and Sanjay Jha-led mobile phone major Motorola have been named among the firms paying highest rate of taxes, with the total tax paid by the two exceeding their annual income.
With a four-year average tax rate of 106.3%, Citi is ranked sixth and Motorola is at the seventh position with 106% of income paid in taxes.
At the same time, Adobe Systems, Cognizant and Hartford Financial -- three other US companies led by persons of Indian origin -- figure in a separate list of 50 firms paying the least rates of taxes.
Surprisingly, the overall tax rate charged in the US is close to 400% in one case, although majority of the American companies pay less than 35% -- the official corporate tax rate in the US, BusinessWeek said.
The list of 50 highest tax paying companies is topped by internet security solutions provider Verisign with a four-year average tax rate of 391.3%.
Verisign is followed by another IT firm Fidelity National Information Services (254.8%), Zions Bancorporation (226.1%), Eastman Kodak (142.1%) and Sun Microsystems (139.5%) in the top five.
The list of 50 companies paying lowest rate of tax is topped by energy firm Range Resources (0.4%), while Shantanu Narayen-led Adobe is ranked at 26th (8.3%), Francisco D’Souza-led Cognizant at 37th (10.2%) and Ramani Ayer-led Hartfold Financial is at 39th (10.4%).
The lists were compiled by BusinessWeek with help from data tracker Capital IQ and is based on the tax burdens of companies in the US wide-based benchmark index S&P 500 index.
“We looked at the companies in the S&P 500 index, excluding those with two or more recent years of losses, and instead of the ‘effective tax rate´ companies calculate and apply to their income statement, pulled out the figure companies disclose as cash taxes paid," the magazine said.
“To minimize the impact of one-time anomalies, we then averaged the last four years’ numbers," it added.
Citi clocked an annual loss of $27.7 billion, while Motorola also suffered a loss of $4.2 billion in 2008, but previously the two companies were profitable.
According to the magazine, “cash taxes paid" for the latest year by Citi stood at $3,170 million while Motorola’s was $407 million.
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