http://www.americanprogress.org/issues/green/news/2011/05/11/9625/exxon-mobil-dodges-the-tax-man/
"Exxon Mobil Corp.s robust balance sheets have become a poster child for what The New York Times dubs the paradox of the United States tax code.
The companys large 2010 profits allowed them to lead Fortune 500s annual ranking of the nations most profitable firms for the eighth time in a row. But the oil giants average effective tax rates are roughly half the 35 percent tax rate that currently stands as the high-water mark for American corporations. Meanwhile, Exxon Mobil and other big oil companies continue to exploit tax loopholes for nearly $4 billion in subsidies each year. These subsidies include write-offs for drilling costs and a deduction for domestic production that was intended for manufacturers, not big oil producers.
Exxon Mobil registered an average 17.6 percent federal effective corporate tax rate on its annual earnings in the three years spanning 2008 to 2010. Its average domestic profits exceeded $6.8 billion. And as a 2011 Citizens for Tax Justice report points out:
Over the past two years, ExxonMobil reported $9,910 million in pretax U.S. profits. But it enjoyed so many tax subsidies that its federal income tax bill was only $39 milliona tax rate of only 0.4 percent.
Even when Exxon Mobil had a record profit of $40 billion in 2008 due to record oil prices it had only a 31 percent effective tax rate. Thats 13 percent lower than the maximum 35 percent despite being Exxon Mobils fifth year as the top corporate earner in Fortune 500s annual listing. The company paid no taxes at all to the U.S. federal government in 2009 on its domestic profits of nearly $2.6 billion. It appears that they avoided the tax man that year by legally funneling their profits through wholly owned subsidiaries in countries like the Cayman Islands, and reinvesting their earnings overseas."