1) Most “corporations” are really small businesses, including S-Corporations or LLCs that don’t pay the corporate tax (they pass their profit on to partners, who pay it under the individual income tax). The AP mistakenly says that 25% of non-payers are “large corporations” – in fact the GAO study indicates only 0.29% are.
2) Only 25% of “large US corporations” reported no tax liability in 2005. Over the 8 years studied, 55% reported no taxes in any year (45% paid corporate taxes in all 8 years). Only 2.7% of large US companies had no tax liability in all eight years.
3) 85% of large business non-payers paid no taxes because they lost money in 2005 (11% deducted losses from past years, and only 3% reached $0 tax liability due to tax credits). As the Tax Foundation points out:
For example, in a “clever tax dodge,” American Airlines avoided income tax for 2005 by losing $862 million. General Motors lost $10.5 billion in 2005; I bet those greedy fat cats didn’t pay any corporate income tax, either.