Largest U.S. corporations paid 10.4% federal tax in 2025, ITEP finds

The 706 largest U.S. corporations paid an effective federal income tax rate of 10.4% on their 2025 profits, the lowest rate the Institute on Taxation and Economic Policy (ITEP) has found in more than 40 years of analyzing corporate income taxes, according to a report published October 22. The statutory rate is 21%.

ITEP, a Washington think tank that researches tax policy, studied U.S.-based, publicly traded companies on the Fortune 1000 or the S&P 500 that reported a U.S. pretax profit and enough data to calculate a rate. Together the 706 reported $1.88 trillion in U.S. profits and paid about $196 billion in current federal income taxes, according to the report. ITEP said the group represents more than a third of federal corporate tax collections in fiscal year 2025.

Companies that paid nothing

ITEP found that 114 of the 706 corporations paid no current federal income tax. In most cases they reported negative taxes totaling almost $5.4 billion, the report said. Named examples include Coinbase, Walt Disney, H&R Block, Kohl’s, Citigroup, United Airlines, DoorDash and Tesla, which paid no federal tax on $5.7 billion in U.S. profits.

A further group of 258 companies, which includes those 114, paid effective rates below 7%. They reported $684 billion in U.S. profits and paid $11.9 billion in current federal taxes, an effective rate of 1.7%. T-Mobile’s rate was 0.4%, according to ITEP. Delta Air Lines, ExxonMobil, Amazon, Coca-Cola, Microsoft, Uber, Meta, Salesforce, AT&T, JPMorgan Chase and Goldman Sachs also fell below 7%.

The size of the tax breaks

ITEP calculated that the 706 companies received $198 billion in corporate tax subsidies in 2025, the gap between the 21% statutory rate and the 10.4% they paid. Had they paid the full rate, the tax bill would have been $394 billion, the report said. Twenty-five corporations accounted for more than half of the subsidies. ITEP’s named figures were Alphabet at $19 billion, Microsoft at $18.7 billion, Amazon at $17.4 billion and Meta Platforms at $13.9 billion, the only other company above $10 billion. The report said accelerated depreciation and research expensing alone saved those four companies $46 billion.

ITEP estimated that the 2017 reduction of the statutory rate from 35% to 21% saved the 706 companies $263 billion in 2025. By category, the report tallied at least $88 billion from accelerated depreciation, over $37 billion from research expensing, at least $22 billion from stock options and $22 billion from the research and development credit.

Differences by industry

Big technology companies paid an average of 10%, with $68.5 billion in breaks, according to the report. Motor vehicle companies averaged 2.7%, with General Motors at 2.8%. Telecommunications companies averaged 6.7% and aerospace companies 7.6%. Five internet retailers (Amazon, Chewy, Etsy, Expedia and Instacart) paid 1.3% on $91 billion in profits, while the other 50 retailers in the study paid 15.4% on $101 billion.

What changed in 2025

ITEP said the One Big Beautiful Bill Act, signed in 2025, restored a looser cap on interest deductions, revived research expensing that the 2017 law had repealed and made expensing of equipment permanent. The report said most of the 2017 law’s revenue-raising business provisions were repealed or weakened.

For comparison, ITEP found an effective rate of 11.2% in 1982, against a statutory rate of 46%, and 11.3% in 2018, the first full year under the 2017 law.

What the authors said

“This is the lowest effective rate that ITEP has uncovered in over 40 years of analyzing corporate income taxes,” the report states. It describes “a corporate tax system that is now more loophole than law” and says “even a 21 percent tax rate remains an accounting fiction for most profitable corporations.”

Matthew Gardner, a senior fellow at ITEP, said the corporate tax system “has been tilted in favor of the nation’s wealthiest and most powerful companies,” and called the outcome “the predictable outcome of deliberate policy choices.” Steve Wamhoff, ITEP’s federal policy director, said, “Congress has repeatedly chosen to expand tax breaks for corporations that are already extraordinarily profitable.” The report’s other authors are Joe Hughes and Spandan Marasini.

Limits of the data

ITEP said its figures may overstate the taxes companies actually paid. Amazon reported $1.22 billion in current federal tax against $1.29 billion in uncertain tax benefits, and the report said its actual rate may be closer to zero. The study draws on companies’ annual 10-K filings with the Securities and Exchange Commission, counts only current federal taxes and excludes deferred taxes. Companies with U.S. pretax losses, and those lacking data such as Berkshire Hathaway, were left out.