Report: Walmart State and Local Tax Avoidance Exceeds $400 Million Annually
Walmart’s U.S. operations deprive state and local governments of more than $400 million a year through a variety of tax avoidance schemes, according to a report released today by Good Jobs First, a non-profit, non-partisan research center based in Washington, DC. The report, Shifting the Burden for Vital Public Services, is available at no cost on the Good Jobs First website at www.goodjobsfirst.org.
“Walmart likes to claim that its stores are an economic boon to local communities,” said Philip Mattera, research director of Good Jobs First and author of the report. “But the fact is that the company tries hard to reduce the revenue stream going to state and local governments.” Walmart does this, the report notes, through methods such as the following:
- seeking lucrative property tax abatements, tax increment financing, infrastructure assistance and other forms of economic development subsidies that in recent years have amounted to roughly $70 million annually;
- using gimmicks such as deducting rent payments made to itself (through a captive real estate investment trust) to avoid an estimated $300 million a year in state corporate income tax payments;
- using an army of lawyers and consultants to systematically challenge its assessments and chip away at its property tax bills, costing local governments several million dollars a year in lost revenues and legal expenses; and
- taking advantage – to the tune of about $60 million a year – of those states that fail to cap the “vendor discounts” they provide to large retailers for collecting sales taxes from their customers
“These practices are not illegal,” notes Good Jobs First Executive Director Greg LeRoy, “but taken together they deprive state and local governments of a sizeable amount of revenue desperately needed for vital public services such as education and public safety.”
Shifting the Burden for Vital Public Services is a synopsis of a series of reports previously issued by Good Jobs First on Walmart’s practices regarding economic development subsidies, property taxes and sales taxes, along with a review of research on the company’s state corporate income tax avoidance. It also contains updated information on those practices.