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There have been articles written, Nike paid no Federal Income tax in 2020. However, looking at its Annual Report below, I see income taxes. So how are these news articles saying this?

I am seeing income taxes.

Screenshot of NIKE, Inc.'s consolidated statements of income

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    I’m voting to close this question because it is not about Personal Finance and Money but about corporate taxation.
    – Dilip Sarwate
    May 4, 2021 at 18:11
  • @DilipSarwate it is about Money and investing however, like stocks and trading
    – mattsmith5
    May 4, 2021 at 18:54
  • Why was this closed, we answer questions about corporate reporting all the time.
    – quid
    May 5, 2021 at 0:00
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    @mattsmith5, I think you got a good answer, the line item for income tax expense has a lot of different numbers included (federal income taxes various state income taxes etc) and some of that will be in footnotes or other explanations, and there's a difference between paying the tax and accruing a tax expense. This question could definitely be reworded to ask about the income tax number rather than a fact check effort against the NYT explicitly.
    – quid
    May 5, 2021 at 0:49
  • who voted this question down? trying to learn, thanks
    – mattsmith5
    May 5, 2021 at 14:45

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Income Tax Expense is not just Federal - it's any income tax, which for Nike includes State and Foreign taxes. If you look at Note 9 of the report you'll see a breakdown in which their federal income tax is actually negative, which may be how they ended up on the NY Times list.

In addition, income tax expense does not necessarily equal income tax paid. Companies have various ways of deferring income tax so that it's accounted for in one year but actually paid in future years. So even a company with a positive income tax expense may not pay it until future years. Whether the NYT criteria is tax accrued or tax paid I have no idea (and don't care) - it's behind a pay wall.

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  • interesting, I will research further, just reviewing the integrity and accuracy of news sites, thanks
    – mattsmith5
    May 4, 2021 at 17:52
  • the news sites will mostly report facts, but they often omit context. if they hadn't, then you would not have found this contradictory. well, the ITP only seems to care about Federal Income Tax, but most companies pay state, local, property, and sales tax. additionally to the things that have been said, federal tax can be $0 or negative because of investment in capital equipment, carry-forward credits from unprofitable years, R&D research, employee stock purchase offers, and credits for operating in incentivized fields (such as researching solar cell technology). not defending companies but
    – FluffyFlareon
    May 5, 2021 at 6:12

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