Marlborough medical products company Hologic was one of 55 corporations that paid no federal income taxes in 2020, according to the think tank Institute on Taxation and Economic Policy.
Not only that, the left-leaning Washington, D.C., group said, but Hologic got a federal tax credit of $62 million.
Hologic was one of 55 big companies to pay no net federal taxes, the institute said, along with Nike, FedEx and others, including the Tennessee insurance company Unum Group, which has hundreds of remote workers in the Worcester area. Those companies should have paid $8.5 billion in total federal taxes but instead received $3.5 billion in what the institute, which analyzed each company’s annual report, called tax rebates.
Hologic called the analysis flawed.
“The analysis confuses Hologic’s tax provision based on GAAP accounting with our actual taxes paid,” the company said in a statement, using the term for generally accepted accounting principles.
“While our GAAP tax rate and tax provision were negative as a result of various acquisitions and divestitures, we still paid $266 million in cash income taxes in fiscal 2020 for income earned that year, nearly all of which was paid to U.S. federal, state and local tax authorities,” Hologic said. “Cash taxes paid were disclosed in our annual report on form 10-K. And additional taxes for 2020 activity were paid after year-end.”
The institute pointed to the 2017 federal corporate tax cuts and the CARES Act in 2020 as helping enable companies to avoid federal taxes. U.S. Sen. Elizabeth Warren, a Massachusetts Democrat, slammed the report’s findings in a tweet: “This isn’t rocket science: giant corporations that report billions in profit shouldn’t be able to pay $0 in federal taxes,” she said.
Hologic reported nearly $3.8 billion in revenue in its fiscal year that ended last September, a 12% jump from the prior year that was helped in large part because of demand for its COVID-19 tests. The company also saw gross profits more than double over the year to $2.2 billion, and net profits return to the black at $1.1 billion.
Hologic’s annual report from last September describes tax benefits, including an effective tax rate in 2020 of a benefit of 10.8%. That’s due, the company said, to a $313-million net tax benefit related to the sale of its medical aesthetics business, as well as tax credits, and the impact of the federal deduction for foreign-derived intangible income, among other factors.
Hologic also said it benefited $341 million from the 2017 federal changes in tax law. That benefit, it said, was booked in the first quarter of our fiscal 2018.
EDITOR’S NOTE: This story’s headline has been changed, and phrasing in the story updated to better reflect Hologic’s federal taxes and credit.
