US states levy an average 6% annual income tax rate on business. But thanks to tax breaks, "single state" tax apportionment and state rules that mirror federal tax exceptions, big US corporations only pay an average 3% of income to the states - and some profitable companies go a year or more without paying any net state income taxes, according to this study by the nonprofit Citizens for Tax Justice.
Three companies that reported profits in those three years paid no state income taxes at all in that period, according to Citizens: Wilmington-based chemical maker DuPont Co.; Washington, DC-based electric utility Pepco, which owns Wilmington's Delmarva Power; and Ohio-based American Electric Power.
Among locally-prominent companies, the report shows Airgas, Air Products, Campbell Soup, DuPont, General Electric, Merck, PNC and Wells Fargo paid well below the national average in state income taxes; AmerisourceBergen and Comcast paid around the national average; and Hershey, Quest Diagnostics, UGI and Universal Health Services paid above average, as a percentage of corporate income in 2008-10.
UPDATE: "It is not unheard of for a company to either have profits at the international level and losses at the national level and vice versa or to have profits at the national level and not at the individual state level," Michael Smith, assistant director of the Delaware Division of Revenue, told me. The Division reviews corporate tax returns and seeks "appropriate remedies" if there's problems, but won't comment on either DuPont's or Delmarva's without their permission, he added.
EARLIER: DuPont "complies with all tax regulations and laws," company spokeswoman Tara Smith told me.
Among the Pennsylvania companies on the list there was no clear pattern of over- or under-payment vs the national average, perhaps reflecting the state's uneven tax code.
The share of US corporate profits paid to states is in long-term decline, according to Citizens. Globalization, specialized tax management and recent corporate complaints that federal business income taxes are now higher than those in China and other rival countries have pressured states to concentrate on personal income and sales taxes instead.