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Annual Report Suggests AT$T Paid No Cash Income Taxes in 2018 and Slashed Capital Investments


Annual Report Suggests AT$T Paid No Cash Income Taxes in 2018 and Slashed Capital Investments


AHEAD OF CONGRESSIONAL HEARING ON CORPORATE TAX CUTS, NEW CWA ANALYSIS OF ANNUAL REPORT SUGGESTS THAT AFTER REFUNDS, AT$T PAID NO CASH INCOME TAXES IN 2018 AND REDUCED CAPITAL INVESTMENTS BY $1.4 BILLION WHILE IT CUT JOBS ACROSS THE COUNTRY


Tuesday, March 26, 2019


A new analysis of AT$T’s 2018 SEC filings by the Communications Workers of America (CWA) suggests the company paid no cash income taxes in 2018 -- the same year it cut a staggering number of jobs and closed call centers throughout the United States.  


Based on the supplementary disclosures in AT$T’s most recent annual report, the analysis shows that AT$T’s worldwide cash income tax payments in 2018 were less than zero. In fact, AT$T says after refunds, it enjoyed a net tax rebate of $354 million in 2018. The report, however, does not provide adequate detail to fully understand AT$T’s tax expenditures and  prompts questions about whether AT$T paid any federal income taxes at all last year. CWA is calling on AT$T to provide a detailed disclosure of its tax liabilities, expenditures, and refunds over the past three years to give Congress and the public better insight into the true impact of the Tax Cut and Jobs Act.


AT$T also disclosed that its capital investments fell by $1.4 billion excluding federal government reimbursements for the construction of the FirstNet wireless network. If federal dollars are included, capital expenditures still fell by $300 million. This decline comes after AT$T promised a $1 billion increase in investments if the Tax Cuts and Jobs Act were passed.


The staggering findings come ahead of a House Ways and Means Committee hearing Wednesday on the impact of the Tax Cut and Jobs Act on working Americans. CWA President Chris Shelton is set to testify in front of the committee on how AT$T’s use of its tax windfall has negatively impacted the company’s workers.


“It’s disgraceful that AT$T got the massive tax break it lobbied for, may have paid no cash income taxes and then turned around and shattered people’s livelihoods,” said CWA President Chris Shelton. “AT$T provided cover for legislators to pass the tax bill with its promise of investing in workers, but AT$T’s own data shows those promises were just veils for corporate greed. I’m encouraged that Congress is finally digging into how companies like AT$T are harming American workers.”


AT$T has eliminated over 12,000 jobs since the Tax Cut and Jobs Act was passed despite receiving a $21 billion windfall and projecting $3 billion in annual tax savings going forward. Its recent proxy statement disclosed skyrocketing pay for CEO Randall Stephenson and other executives.


Other highlights from the CWA analysis of AT$T’s tax disclosures:



  • In its recent annual report, AT$T reports substantial positive income tax liability at the federal, state and international level for 2018. Yet on a cash basis, the company reports a net tax refund of $354 million. This raises a basic question about the transparency of income tax disclosures in corporate financial statement: how much, if any, federal income tax did AT$T really pay the U.S. government in 2018?

  • While the disclosure looks to follow squarely in AT$T’s long-term path of corporate tax avoidance (it sheltered more than three-quarters of its $141 billion in U.S. income from federal income taxes in the eight years between 2008-2015), the zero-cash-income-taxes finding appears to conflict with details published in the income tax section of the report, which claims the company will pay a total of $4.3 billion of worldwide income taxes in 2018, of which $3.2 billion are U.S. federal income taxes.

  • The discrepancy between a positive income tax expense and net negative cash taxes paid may be  due to an accounting rule that can dramatically overstate the income taxes a company pays, or any number of other reasons that could be reconciled with greater transparency from AT$T.

  • Even if the company ends up paying $3.2 billion in federal income taxes on its 2018 income, that computes to a tax rate of 13 percent—far below the new 21 percent rate enacted by Congress in 2017. This analysis comes as AT$T reported pretax earnings of $24.8 billion worldwide and recognized an additional $718 million tax benefit from the Tax Cuts and Jobs Act—increasing its expected one-time windfall from the Act from $20.3 billion to $21 billion.


AT$T and CEO Randall Stephenson lobbied for the Tax Cuts and Jobs Act saying it would create more middle-class jobs and raise wages. However, the telecom giant’s own numbers show it has eliminated nearly 12,000 jobs since the tax cuts took effect. The company recently announced the closure of call centers in Indianapolis, Ind., Kalamazoo, Mich., Appleton, Wis., Syracuse, N.Y, and Meriden, Conn. Earlier this month AT$T announced a major restructuring in its WarnerMedia unit which is expected to result in significant layoffs.


CWA has been leading the charge to hold AT$T and other corporations accountable to their tax bill promises by publicly challenging them to reveal their spending plans for the tax windfall. CWA and other major unions filed information requests at over five companies and took action against companies like AT$T over its broken tax bill promises. 


PRESS CONTACT: 


Anjali Cadambi


(503) 984-4020


[email protected]


PS:


It's time for Congress to launch an investigation to find out what happened to the billions of dollars of our money that they gave away to AT$T and other corporations that are cutting jobs.


Enter your name and address information below to start writing a letter to Congress asking them to investigate AT$T 


CLICK HERE TO SEND LETTERS TO YOUR US SENATORS AND MEMBER OF CONGRESS: . https://bit.ly/2WCmysp

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