Facebook is getting a $429 million tax refund from the IRS despite the fact that they had record profits last year.
The social media site didn't pay a dime in federal and state taxes in 2012 and, thanks to big tax breaks for executive stock options, the company is getting a gigantic refund check .
The tax breaks won't stop there. Fox News reports that Facebook will continue to get $3 billion in tax breaks in the coming year.
Robert McIntyre from the group, Citizens for Tax Justice, spoke to Fox News about Facebook's $429 million tax refund, stating:
"The employees cash in stock options, and at that point there is tax deduction for the company ... even though it doesn’t cost Facebook a nickel, the government treats it as wages and they get a deduction for it. And usually it doesn’t wipe out companies whole tax bill, although many companies get big breaks from it."
Businessweek reports that Facebook spokeswoman Ashley Zandy declined to discuss the tax break.
Zandy spoke instead about a transcript from a Facebook conference call with analysts. During the call, CFO David Ebersman speaks about the accumulated tax benefits prior to noting that the company ended its fiscal year with "nearly $10 billion in cash and investments."
This big tax break that Facebook is getting is the exactly what President Obama spoke about ending during his 2013 State of the Union speech last week.
He stated, that the country would "save hundreds of billions of dollars by getting rid of tax loopholes and deductions for the well-off and well-connected."
However, all of the support that Obama got from social media sites like Facebook during his presidential campaign may have many questioning if he is going to end the tax breaks to the social media industry, or just heavy hitters like the lucrative oil and gas industries.
Heritage Foundation tax policy analyst, Curtis Dubay tells Fox News that Obama has a double standard when it comes to speaking out about the tax-break topic, stating, "He often points to oil and gas companies as taking corporate deductions that are perfectly legal under the law. But he leaves out others like Facebook , which is perfectly legal. But he doesn’t point them out and make them an example the same way he does an industry like oil and gas."
Sources: Businessweek, Fox, MSNBC
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