Food, Inc. on Facebook (Photo credit: Jory™)

Facebook Inc. Pays No Taxes in 2012

In their most recent filing, Facebook Inc. reported not paying any taxes on their 2012 income of $1.1 billion. There are a number of reasons that a company would not pay taxes on such a sizable amount of income and this case it appears that loses from prior years and the granting of stock options to employees are the main reasons. The company lost money during earlier pre-IPO years when it was growing and only beginning to monetize its services. In addition the company gave stock grants to employees to a large degree which is common in the technology industry. These stock options are considered business costs and are therefore deductible.