Zoom Increased Profits 4000% Last Year, Still Paid Zero Income Taxes
If you bought a Zoom Pro account in the last year to help have meetings or video chat with family and friends, you paid $14.99 a month. And that’s $14.99 more than Zoom paid in federal taxes for the entire year 2020. Despite the fact that Zoom made $660 million in profits during the pandemic year of 2020, they paid $0 in federal income taxes on that profit.
If you paid $14.99 a month for a Zoom Pro membership, you paid more to Zoom than it paid in federal income taxes even as it made $660 million in profits last year – a 4,000 percent increase since 2019. Yes. It's time to end a rigged tax code that benefits the wealthy & powerful. https://t.co/P6hQnpWAPT
— Bernie Sanders (@SenSanders) March 21, 2021
Senator Bernie Sanders was quick to notice this in a Sunday morning tweet. Sanders notes that Zoom “made $660 million in profits last year – a 4,000 percent increase since 2019. Yes. It’s time to end a rigged tax code that benefits the wealthy & powerful.”
Zoom made $660 million in profit last year, up 4,000%.
It paid $0 in federal income tax.
Almost 100 Fortune 500 companies pay no income tax each year.
Meanwhile people laid off in a pandemic are paying taxes on their unemployment benefitshttps://t.co/obwDRpPfIG
— Dan Price (@DanPriceSeattle) March 22, 2021
This reporting comes from the tax analysis nonprofit Institute on Taxes and Economic Policy (ITEP), and explains how Zoom paid $0 in federal taxes. “The main answer appears to be the company’s lavish use of executive stock options,” ITEP explains. “Zoom’s income tax reconciliation says it reduced its worldwide income taxes by $300 million in 2020 using stock-based compensation.
Zoom saw its profits increase 4,000% last year.
But, wait for it, paid no federal income taxes. Zero.
Folks, the system is rigged.
— Robert Reich (@RBReich) March 20, 2021
“Companies that compensate their leadership with stock options can write off, for tax purposes, huge expenses that far exceed their actual cost,” the report continues. “This is a strategy that has been leveraged effectively by virtually every tech giant in the last decade, from Apple to Facebook to Microsoft. Zoom’s success in using stock options to avoid taxes is neither surprising nor (currently) illegal.”
— Judd Legum (@JuddLegum) March 21, 2021
Zoom is based in San Jose, CA. That means they will be an unwelcome addition to our annual list of Bay Area tech companies that pay no federal taxes.