
FedEx Cut Its Tax Bill to $0 - pseudolus
https://www.nytimes.com/2019/11/17/business/how-fedex-cut-its-tax-bill-to-0.html
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Pick-A-Hill2019
A $1.5 Billion Tax bill reduced to Zero Dollars, all for the low, low price of
$10 million! (2017 FedEx lobbying spend). From a corporate POV that's gotta be
one fantastic ROI. The human part of me just shakes its' head at the disparity
between the many and the few.

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ab_testing
_The law cut the corporate rate to 21 percent from 35 percent, and allowed
companies to deduct the full cost of new equipment investments in the year
that they make them._

The key takeaway of the whole article is right here. So to reduce its tax
bill, FedEx made some equipment purchases and decided to deduct the full cost
bringing down its tax liability to zero. However that means that next year,
FedEx would not be eligible to depreciate that equipment. So next year it
should be back to paying regular taxes or trying to find another strategy to
reduce its tax bill.

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RugnirViking
FedEx is a huge company. They are almost certainly going to buy equipment
every year

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Arnt
In that case it would make no difference.

Depreciation works like this: When you spend a million on equipment, you get
to claim a certain percentage of its cost against taxes every year until you
reach 100% and the equipment is projected to require replacement.

For equipment with a projected lifetime of five years the percentage is 20%.
For equipment that will be replaced next year the percentage is 100%, and this
rule would makes no difference.

Effectively, FedEx got to make claims in one year that it would otherwise have
to spread over n future years.

