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In 2025, Meta paid an effective federal tax rate of 3.5%

bsky.app

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Re: In 2025, Meta paid an effective federal tax rate of 3.5%

#121

IIUC Meta is spending more on capital (due to AI buildout) than they are receiving in profits. Given Depreciation this is expected. And ... the intent of the law, to prompt capital investment. What's the scandal, exactly?

Wait it gets worse for the "article" ITEP gets the number by dividing Meta’s current federal tax expense ($2.82B) by its domestic pretax income ($79.64B), which is about 3.5–3.6%. But Meta’s total 2025 GAAP effective tax rate was actually 29.6%, because it also booked a huge $15.93B charge tied to the Corporate Alternative Minimum Tax and valuation allowances.

Both numbers are wrong. Meta's actual income before tax was about $83 billion and its actual tax cost was $25 billion. This is an effective tax rate of ~30%.

https://investor.atmeta.com/investor-news/press-release-deta...

Re: In 2025, Meta paid an effective federal tax rate of 3.5%

#122

Where is this figure coming from? According to Meta's press release, the effective tax rate is 30% [1]. > The full year 2025 provision for income taxes includes the effects of the implementation of the One Big Beautiful Bill Act during the third quarter of 2025. Absent the valuation allowance charge as of the enactment date, our full year 2025 effective tax rate would have decreased by 17 percentage points to 13%, co…

The effective federal tax rate, and the amount of federal tax Meta paid as a percentage of income, are two different things.

More details here: https://itep.org/meta-tax-breaks-trump-mark-zuckerberg/

The 10-K filed by Meta is linked to in that article, and can be found here: https://www.sec.gov/ix?doc=/Archives/edgar/data/1326801/0001...

If you dig into the details in the Income Tax Disclosure block, Meta paid $2.8B in Federal income taxes for the year ended December 31, 2025.

Meta deferred a large chunk of Federal income taxes.

So, while the effective Federal income tax rate for 2025 was about 30%, largely due to a 3rd quarter charge of $14B against deferred taxes (Meta's effective tax rate for 2023 was 17.6% and for 2024 it was 11.8%), they paid 3.5% of their income as Federal income tax.

Re: In 2025, Meta paid an effective federal tax rate of 3.5%

#123
post #66

Earlier quoted context omitted.

No, I think both of the following statements can be true at the same time: 1. The audited financial statement meets all requirements and is accurate according to the relevant definitions, stating that the effective federal tax rate is 30%. 2. They pay an effective federal tax rate of 3%.

I don't think those statements can be true at the same time, without significant qualifications on (2) in a way that make it meaningless. Certainly not the reasonable straightforward reading of the phrase.

Maybe you are right, but maybe the significant qualifications are on (1) in a way that make it meaningless.

There is a reason why large companies have entire departments dedicated to identifying and utilizing every available national and international tax loophole, all while working to maintain a positive public image.

Re: In 2025, Meta paid an effective federal tax rate of 3.5%

#124
post #39

Earlier quoted context omitted.

I think it's from this: https://itep.org/meta-tax-breaks-trump-mark-zuckerberg/

The post seems to be comparing quarterly figures for tax with annual profit. The doc they cite clearly $25B as provision for income tax.

While they provisioned $25B, the 10-K Meta filed states they paid $2.8B in Federal income taxes for the full year 2025. The amount they provisioned is not limited to Federal income taxes, it also includes state and foreign income taxes.

Re: In 2025, Meta paid an effective federal tax rate of 3.5%

#125

Where is this figure coming from? According to Meta's press release, the effective tax rate is 30% [1]. > The full year 2025 provision for income taxes includes the effects of the implementation of the One Big Beautiful Bill Act during the third quarter of 2025. Absent the valuation allowance charge as of the enactment date, our full year 2025 effective tax rate would have decreased by 17 percentage points to 13%, co…

The effective federal tax rate, and the amount of federal tax Meta paid as a percentage of income, are two different things. More details here: https://itep.org/meta-tax-breaks-trump-mark-zuckerberg/ The 10-K filed by Meta is linked to in that article, and can be found here: https://www.sec.gov/ix?doc=/Archives/edgar/data/1326801/0001... If you dig into the details in the Income Tax Disclosure block, Meta paid $2.8B…

>Meta deferred a large chunk of Federal income taxes.

How are can we reasonably expect them to be deferred for? Are we talking on the order of years, or decades?

Re: In 2025, Meta paid an effective federal tax rate of 3.5%

#126
post #125

Earlier quoted context omitted.

The effective federal tax rate, and the amount of federal tax Meta paid as a percentage of income, are two different things. More details here: https://itep.org/meta-tax-breaks-trump-mark-zuckerberg/ The 10-K filed by Meta is linked to in that article, and can be found here: https://www.sec.gov/ix?doc=/Archives/edgar/data/1326801/0001... If you dig into the details in the Income Tax Disclosure block, Meta paid $2.8B…

>Meta deferred a large chunk of Federal income taxes. How are can we reasonably expect them to be deferred for? Are we talking on the order of years, or decades?

Mostly never -- most of the deferral was an accounting adjustment for the value of future tax credits that they could no longer take advantage of, so there is no actual tax liability here that will eventually be paid.

Re: In 2025, Meta paid an effective federal tax rate of 3.5%

#127
Taxation of the huge companies is obviously different than that of others. An army of accountants and lawyers work to find law loopholes to inflate the expenses. And then bribery can come to play. Which public servant can resist millions of dollars? They have to pay attention nobody finds out though.

Re: In 2025, Meta paid an effective federal tax rate of 3.5%

#128

Earlier quoted context omitted.

"X does A" does not mean "only X does A."

It’s a fair retort here, though, where the grandparent comment was clearly trying to grandstand in opposition to his perceived enemy tribe, mostly unprovoked. Edit: in other words, it’s a fair interpretation of the comment to be saying “We wouldn’t have to deal with all this misinformation about taxes if there wasn’t some giant liberal conspiracy”, given that they weren’t replying to any specific part of the parent p…

Well, no, that is not a reasonable interpretation at all. For one, the commenter did not proclaim existence of conspiracies, but the existence of conspiracy theories. People mix these up a lot. Secondly, the other interpretation you propose exhibits roughly the same form as "X does A", so it's worth repeating that it does not mean "only X does A" either!

Re: In 2025, Meta paid an effective federal tax rate of 3.5%

#129

Earlier quoted context omitted.

That's why I often ask for "Source?" — because sometimes people seem to make up numbers. However, whenever I do this, I receive a large number of downvotes. Maybe it's not common on HN to back up claims with sources.

There is another possibility. “Source?” is a low effort comment, but GP’s is not.

IMO putting an important number in your post/comment, and not providing a source for that number, is also kind of low effort. If you verified the number before writing, you already had the source ready and you could just put it in the comment. If you wrote the number from memory, not checking if your memory is correct is low effort (but you can also warn the readers that the number is from memory, that's better). If you're intentionally misrepresenting what the number means in your comment (and giving the source would contradict the meaning of your comment), or just giving a number that "feels right" or a number that you know is wrong, then it's low effort and a lie.

I try to verify important numbers and facts in what I read, and seriously, there's so much fake or misrepresented info everywhere, on every political side, that it's depressing, and it makes me don't believe literally anything without a source, unless I verify it myself. Of course when someone provides a source, I often look into the source, and sometimes it turns out that the text misinterpreted/misrepresented the meaning of the source. On Wikipedia, I also check if what is written is actually in the source, because sometimes the editor writes his own opinion while only loosely basing the text on a source (or basing it on nothing).

Verification can take some time, and that's the effort passed from the author of unsourced claim to its many readers, unless they just trust it or ignore the claim.

When I write anything I try to include sources for important things. If I wouldn't include a source, and someone asked "Source?" I wouldn't think "what an annoying guy", I'd think "oh, I could have linked that in the first place". And I usually upvote "Source?" comments (unless it's a thing that anyone can check in 30 seconds). I usually double-check the facts in what I'm writing, and many times I almost wrote something from memory that wasn't true, but looking for a source saved me from that.

Re: In 2025, Meta paid an effective federal tax rate of 3.5%

#130
post #66

Earlier quoted context omitted.

I don't think those statements can be true at the same time, without significant qualifications on (2) in a way that make it meaningless. Certainly not the reasonable straightforward reading of the phrase.

Maybe you are right, but maybe the significant qualifications are on (1) in a way that make it meaningless. There is a reason why large companies have entire departments dedicated to identifying and utilizing every available national and international tax loophole, all while working to maintain a positive public image.

> maybe the significant qualifications are on (1) in a way that make it meaningless.

I don't agree with this. Are you willing to suggest any specific qualifications you take issue with, so the rest of us can consider them?

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