Major U.S. corporations report record low effective tax rates

A study by the Institute on Taxation and Economic Policy (ITEP) reveals that the nation’s largest corporations paid an average federal income tax rate of just 10.4 percent in 2025. This represents the lowest rate documented in over four decades of research. Of the 706 major corporations studied, which collectively reported $1.88 trillion in domestic profits, 114 paid no current federal income tax at all.

The findings attribute these low rates to the combined effects of the 2017 and 2025 tax laws. Among the largest beneficiaries were Alphabet, Microsoft, Amazon, and Meta. Specifically, Meta reported an effective tax rate of just 2 percent for the nine months ending September 30, 2026, despite recording $53.5 billion in income before taxes. A significant factor for Meta was an $8.03 billion tax benefit resulting from a US Treasury Department notice regarding relief from the corporate alternative minimum tax for domestic research and development expenses.

In total, the corporations studied received $198 billion in federal tax subsidies by paying less than the 21 percent statutory rate. The study notes that 258 corporations paid effective rates below 7 percent, despite reporting $683 billion in U.S. profits.