Colorado Moves to Close Offshore Tax Loopholes
The Colorado House of Representatives advanced a measure to close offshore tax loopholes on Monday.
The move comes on the heels of a new report showing companies are doubling down on efforts to stockpile profits overseas and avoid paying U.S. taxes.
Richard Phillips, senior analyst with Citizens for Tax Justice, says if House Bill 1275 becomes law, it could be a model for other states to make corporations pay their fair share.
“But basically, what Colorado has passed is a rule that says,’Hey, if this company is putting a lot of their profits in tax havens, we’ll just say that the tax-haven profits is really profits earned by the U.S. company, and they should pay taxes to states on that,'” says Phillips.
Fortune 500 companies now hold a record $2.4 trillion outside U.S. borders, according to the report. Phillips says loopholes in the tax code allow companies including American Express, Bank of America, Nike, Safeway, Wells Fargo and others to avoid paying up to $695 billion in taxes.
If the bill clears the House, it faces an uphill battle in the GOP-controlled Senate. He adds three multinationals headquartered in Colorado made this year’s report. Englewood-based CH2M Hill is estimated to have $331 billion in profits offshore. Denver’s Liberty Global has just over $11 billion and Western Union, also in Englewood, has $7.5 billion overseas.
“When companies are allowed to pay less in taxes and are allowed to use these offshore loopholes, it means that average taxpayers have to pay more,” says Phillips. “Only these multinational corporations get access to this great offshore loophole; no one else does.
” The report recommends lawmakers act promptly to put a stop to tax havens. Phillips says 79 of the companies surveyed increased their declared offshore cash by at least $500 million each in the last year alone, and 12 added more than $5 billion per company.
