Big Oil Pays 11.7 percent tax rate



Senior Policy Counsel, Energy and Environment


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By Marc Priester on Monday, August 4th, 2014

ExxonMobil’s Headquarters in Houston, TX

The tax code lists that companies are to pay 35% taxes on their income to the federal government. But according to a new report by Americans United for Change, how much of that tax rate the largest oil companies pay is significantly lower. According to the report, the top 20 largest oil companies have exploited several tax loopholes to lower their actual rates to an average of 11.7%. The loopholes they specifically target allow them to forgo taxes they would immediately have to pay, and instead send them down the river, to be paid at a later date – known as a tax deferral.

The top four oil companies of ExxonMobil, ConocoPhillips, Occidental, and Chevron account for well over 80% of the income of the top 20 companies as well as more than 80% of the tax revenue generated from that same group. ExxonMobil lead the way in terms of income with an astounding $42 billion in 2012. However, even these corporations paid very little of the taxes they actually owed. Occidental paid less than a billion of its $5.4 billion tax bill owed to the United States. This means this corporation did not pay more than 80% of its tax bills. When one compares that to the over $17 billion of income Occidental made last year, the taxes actually paid by the company begin to seem microscopic.

Smaller companies however, pay even less taxes. The report states that these companies pay an average of 3% in taxes on income. These companies deferred 87% of their total tax obligations.

The United States tax code allows for companies to largely dodge their tax obligations. Unlike the U.S., foreign nations are cited as collecting 46% of the income of the oil companies that operate within their territory. These countries are able to fully collect their taxes due to the fact that they do not allow for extensive tax deferrals like the U.S.

The federal tax code may be set at a similar or even higher rate than many peer nations. Yet when tax deferral and loopholes are accounted for, these U.S. companies can end up paying far less than they are expected to.

Read the full report here.

3 responses to “Big Oil Pays 11.7 percent tax rate”

  1. Selva Jeganathan says:

    There is a difference between “accounting tax expense” reported on the SEC reports and “tax liability”. When looking at an SEC report, you need to extract (1) the “current federal and state tax expense” and (2) the income earned solely in the United States. The first number divided by the second number is a more accruate percentage of US taxes paid.

  2. Shannon Baker-Branstetter says:

    As noted in the report, these data come from SEC filings.

  3. Selva Jeganathan says:

    Not sure where the 2013 Occidental Petroleum information in this article is coming from, but it is significantly different from what the company reported to its shareholder in the 2013 Annual Report which can be found at

    I suggest you correct this misleading article or provide your source of independently verifiable information.

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