Report: GE will pay taxes after all
General Electric logo on a stove
STEVE CHIOTAKIS: A new report out today says the nation's largest corporation, General Electric, will indeed pay taxes for 2010. The New York Times reported more than a week ago, GE didn't pay any income taxes on billions of dollars it made last year.
But the report out today produced by Propublica and Fortune.com says that's not altogether true.
The story's co-authored by Fortune's Allan Sloan, who's with us now. Good morning Allan.
ALLAN SLOAN: Good morning Steve.
CHIOTAKIS: So you found out GE did in fact pay taxes. How did the earlier reports get it so wrong?
SLOAN: They confused a number that goes to share holders with the number that goes to the IRS, and they're different numbers.
CHIOTAKIS: So why didn't GE just come out with a PR machine and you know, at the time, say, "Whoa, that's not right. We really did pay some taxes. This was a mistake?"
SLOAN: GE's tax department, which is notoriously secretive and I think not communicative even with the rest of the company, and the PR department did not quite understand what was going on, and were very confused, and never got the message out, or as far as I know still haven't gotten it out. But my partner Jeff Gerth and I sort of figured this out and after a whole lot of time, they said, you know, you're right. We really do have an income tax liability for 2010.
CHIOTAKIS: Do we have any idea of how much that liability is?
SLOAN: No. The term GE uses is "small" and when I said, "What does 'small' mean" no body will tell me and everything is relative, it won't actually be complete. We settled until GE finishes preparing its tax return for 2010, which is probably going to be a while from now because they've got until September to file it.
CHIOTAKIS: What's the bottom line here Allen?
SLOAN: Well, the bottom line is there's a very good story to be written on the operations of GE and its approach to taxes and its tax department, because they are notoriously aggressive, they pay as little tax as possible, and there's a serious conversation to be held about that. But let's at least figure out what the problem is, instead of shrinking and looking for victims in mad men and examples who are in fact not examples.
CHIOTAKIS: Fortune magazine's Allan Sloan. Allan, thank you.
SLOAN: You're welcome Steve.