Last week, Citizens for Tax Justice and the Institute on Taxation & Economic Policy released a report showing that 265 consistently profitable Fortune 500 companies avoided paying an estimated $42.7 billion in state corporate income taxes over 3 years.
The data confirms the bad news that over the past two decades, corporations have become remarkably creative in figuring out schemes to avoid paying their fair share in taxes. The result is fewer dollars to invest in schools, roads and safe, healthy communities.
But here's the good news: there is a simple way for our policymakers in North Carolina to crack down on corporate tax dodging. All they have to do is require corporations to pay taxes on profits earned in states where they do business. This common-sense idea, called "mandatory combined reporting," could raise up to $100 million each year in North Carolina.
These dollars would be enough to hire more than 2,000 classroom teachers or preserve vital health services for children, the elderly, and North Carolinians with disabilities that are threatened by recent state budget cuts.
Help us make the case to state lawmakers that it's time to put the people of North Carolina first and ensure that corporations pay their fair share of taxes by enacting mandatory combined reporting.
Stop corporate tax dodging by enacting mandatory combined reporting
We believe corporations doing business in North Carolina should contribute to the schools, roads and courts that make the state such a great place to do business. If corporations don’t contribute their fair share in taxes, working families and seniors will be forced to make up for what corporations don’t pay.
We believe adopting mandatory combined reporting for multi-state corporations is particularly vital at this time because:
- Combined reporting would level the playing field between locally owned businesses and multi-state corporations at a time when small and mid-sized businesses are struggling to compete with big corporations.
- Combined reporting would raise much-needed revenue to support key investments in public education and health by putting an end to many abusive corporate tax shelters and ensuring that multi-state corporations pay their fair share in taxes.
- Enacting combined reporting would be an important step in modernizing North Carolina’s outdated tax system, which no longer meets the needs of the state’s 21st-century economy.
Therefore, we the undersigned urge the North Carolina General Assembly to enact mandatory combined reporting.