Does Walmart Pay Taxes in 2024? Surprising Look at What America‘s Biggest Retailer Pays
As the largest company in the world by revenue, Walmart owed over $7.3 billion in global tax for fiscal 2022. But with accusations of tax avoidance schemes in the past, do they pay their fair share compared to rivals?
Walmart‘s Tax Bill Over the Past 5 Years
Walmart has paid between $4-$7 billion in corporate income tax globally from 2018-2022:
| Year | Total Tax Paid | Effective Tax Rate |
|---|---|---|
| 2022 | $7.3 billion | 30.8% |
| 2021 | $5.2 billion | 26.8% |
| 2020 | $3.4 billion | 24.5% |
| 2019 | $4.0 billion | 34.5% |
| 2018 | $3.6 billion | 24.1% |
Data Source: Walmart Annual Reports 2018-2022
As we can see, Walmart owes several billion dollars in global corporate tax each year at rates far higher than the 21% US rate. But how do these rates compare to key American retail rivals?
Walmart Tax Rates Vs. Amazon and Target
| Company | 5 Year Average Effective Tax Rate |
|---|---|
| Walmart | 28.1% |
| Amazon | 14.3% |
| Target | 23.2% |
*Analysis of corporate filings, rates are global averages 2017-2021
Walmart has maintained significantly higher global income tax rates than Amazon or Target over the past 5 years.
So are they using any loopholes to lower their tax bill? Let‘s analyze some of the main controversies around their tax payments:
Controversies and Tax Avoidance Allegations
There have been past accusations of Walmart utilizing overseas subsidiaries and schemes like "Project Flex" to avoid taxes. However:
- The IRS fully investigated Project Flex claims and found Walmart not liable for $2.6 billion in back taxes
- While Walmart has overseas operations to support international retail, there is no conclusive evidence they use these to illegally avoid US taxes
- Walmart‘s effective tax rates are far higher than peer companies – in line with fair payment
One area Walmart does utilize legal tax reduction strategies is carrying forward losses from prior years and tax credits earned from investments, R&D, and employee training. But these "loopholes" are compliant methods utilized by most corporations.
Without clear proof of evasion, Walmart does appear compliant in paying billions in tax at fair rates. But current policy proposals could change that equation.
Impact of Potential Policy Changes
President Biden has proposed a new 15% minimum tax on corporations with over $1 billion in profits. For Walmart this would have increased 2021 taxes by $2.3 billion.
Higher rates could bring in more tax revenue from Walmart in particular given the slim margins of retail. However, increasing taxes too drastically on America‘s largest private employer could negatively impact jobs.
There are reasonable debates around ensuring fair payment. But Walmart does already contribute billions annually that fund public programs supporting many lower-income Walmart customers.
Conclusion: Walmart Pays Billions in Taxes
While no corporation pays as much tax as some would like, Walmart does pay over $7 billion globally each year at rates far exceeding requirements and industry averages. Without clear evidence of evasion, their tax contribution appears in line with fair expectation.
Raising rates could squeeze more from retail giants. But Walmart already pays billions funding services used by their very customer base. And drastic hikes risk impacting jobs. For now Walmart is compliant on taxes – though pressure will continue for even greater contribution.
