Verizon Communications is calling a report from the Communications Workers of America (CWA) claiming the communications giant has dodged its tax obligations “deceptive and politically motivated” ahead of a media briefing on the study scheduled for tomorrow.
CWA says the report shows that Verizon is “one of the nation’s biggest tax dodgers.”
It states that Verizon has manipulated state revenue rules, sought economic development subsidies and structured its business and tax affairs to produce a negative federal income tax rate and avoid $1.5 billion in taxes on the sale of its landlines and other assets. The study was released last week by Citizens for Tax Justice (CTJ) and the Institute on Taxation and Economic Policy.
Verizon says the study is inaccurate and fails to properly account for deferred taxes and income to Vodafone, the co-parent of Verizon Wireless.
“This union-orchestrated report is deceptive and politically motivated,” Verizon spokesman Bob Varettoni said in an e-mail response. “Verizon fully complies with all tax laws and pays its fair share of taxes.”
Varettoni said the report excludes deferred payments on some taxes, inaccurately includes profits belonging to Vodafone and ignores the $1.79 billion in taxes Verizon paid between 2008 and 2010. Nearly half of the income from Verizon Wireless is taxable to Vodafone.
The CTJ report states that Verizon Communications had a negative tax rate of nearly 3 percent between 2008 and 2010, but Verizon’s 2010 annual report filed with the SEC paints a different picture. According to the 10-K filing, Verizon Communications paid $1.2 billion in income taxes in 2008, $158 million in income taxes in 2009 and $430 million in income taxes last year, net of amounts refunded by the government.
CWA could not provide an immediate response to Verizon’s rebuttal. The union plans to hold a media briefing on the report tomorrow morning.
The report comes amid strained relations between Verizon Communications and its 45,000 union workers from CWA and the International Brotherhood of Electrical Workers, which went on strike in August after they were unable to come to an agreement on a new contract.
Filed Under: Industry regulations
