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Some big U.S. companies dodge state income taxes: study

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[March 21, 2014]  WASHINGTON (Reuters)  Some profitable U.S. corporations that avoid paying federal income taxes manage to do the same in states where they operate, said a study issued on Thursday by a tax activist group.

From 2008 through 2012, ten U.S. companies paid no state income taxes, said the left-leaning Citizens for Tax Justice (CTJ).

Among companies named in the study were aerospace group Boeing Co, drugmaker Merck & Co Inc and industrial group Rockwell Automation Inc.

Companies are increasingly making deals with state lawmakers to reduce their tax bills, said Matthew Gardner, a co-author of the report. "There is a disturbing trend toward enacting targeted tax breaks for specific companies," he said.

Some states did not collect corporate taxes in the years CTJ examined, including Washington State, where Boeing was founded.

A spokesman for Boeing said it has paid hundreds of millions of dollars in Washington State's "business and occupation" tax, which is based on gross receipts.

Representatives for Merck and Rockwell did not immediately respond to requests for comment on Thursday.

Of the Fortune 500 companies CTJ studied, 269 were profitable in each of the five years examined and avoided a combined $73.1 billion in state income taxes, the study found.

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Ninety companies paid no state taxes in at least one of the years examined, CTJ said.

Most states rely more heavily on property, sales and individual income taxes for revenue than on corporate taxes.

(Reporting by Patrick Temple-West; editing by Kevin Drawbaugh, Bernard Orr)

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