Citizens for Tax Justice , 202-626-3780 January 17, 2002
Less Than Zero: Enron's Income Tax Payments, 1996-2000

Click here to see this analysis in PDF format.


A January 17 analysis of Enron's financial documents by Citizens for Tax Justice finds that Enron paid no corporate income taxes in four of the last five years-- although the company was profitable in each of those years.

  • Over the five-year period from 1996 to 2000, Enron received a net tax rebate of $381 million. This includes a $278 million tax rebate in 2000 alone.
  • Over the same period, the company’s profit before federal income taxes totaled $1.785 billion. In none of these years was the company’s pretax profit less than $87 million.
Federal Income Taxes Paid by Enron, 1996-2000
($-millions)
  2000 1999 1998 1997 1996 96-00
U.S. profits before federal income taxes $ 618 $ 351 $ 189 $ 87 $ 540 $ 1,785
Tax at 35% corporate rate would be: $ 216 $ 123 $ 66 $ 30 $ 189 $ 625
Less tax benefits from stock options 390 134 43 12 19 597
Less tax savings from other loopholes, etc. 104 94 36 1 173 409
Federal income taxes paid (+) or rebated () $ 278 $ 105 $ 13 $ 17 $ 3 $ 381

At the 35 percent tax rate, Enron's tax on profits in the past five years would have been $625 million, but the company was able to use tax benefits from stock options and other loopholes to reduce its five-year tax total to substantially less than zero.

Among the loopholes used to reduce the company’s tax liability was the creation of more than 800 subsidiaries in “tax havens” such as the Cayman Islands.


To read ITEP’s October 2000 report on Corporate Income Taxes in the 1990s, which discusses the use of stock options and other loopholes to reduce corporate income taxes, click here.


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