Oct. 06--Illinois' Fortune 500 companies have stockpiled more than $135 billion in profits overseas that aren't subject to U.S. taxes, with AbbVie, Abbott and Caterpillar holding the most money in other countries, a new report shows.
The numbers were in a study, released Tuesday by Citizens for Tax Justice and Illinois PIRG, about Fortune 500 companies' use of offshore tax havens.
"(U.S.) multinational corporations' use of tax havens allows them to avoid an estimated $90 billion in federal income taxes each year," the report said.
The U.S. is among a few developed countries that charge taxes on income gained overseas. Some companies have said the U.S. needs to change its tax policies if it wants companies based here to be competitive and to continue to build operations stateside. They also say they have extensive foreign operations and many options when making decisions related to expansion, new product sourcing, and mergers and acquisitions.
AbbVie, Abbott and Caterpillar are among the top 30 nationally with the most money held offshore, the report said.
Topping the list was Apple.
As of June 27, according to a U.S. Securities and Exchange Commission filing, Apple's cash, cash equivalents and marketable securities held by its foreign subsidiaries was $181.1 billion.
Combined, AbbVie, Abbott and Caterpillar have $64 billion in earnings reinvested indefinitely in foreign subsidiaries.
--In its annual shareholder report, filed in February, Abbott said it "does not record deferred income taxes on earnings reinvested indefinitely in foreign subsidiaries."
Earnings "reinvested indefinitely in foreign subsidiaries as working capital and plant and equipment" were $23 billion as of Dec. 31, Abbott said.
--AbbVie's shareholder report also cites $23 billion in earnings from foreign subsidiaries that have been "indefinitely reinvested for continued use in foreign operations."
--Says Caterpillar in its annual report: "We have recorded income tax expense at U.S. tax rates on all profits, except for undistributed profits of non-U.S. subsidiaries of approximately $18 billion which are considered indefinitely reinvested."
Other Illinois companies mentioned in the report as having at least some money held offshore include: Anixter, Archer Daniels Midland, Baxter, Boeing, CDW, Corn Products, Deere, Dover, Illinois Tool Works, Kraft, LKQ, McDonald's, Mondelez, Motorola Solutions, Navistar, Tenneco and W.W. Grainger.
byerak@tribpub.com
