The lowest payers

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The lowest payers

No one likes to pay taxes, and as it turns out, many companies don't pay much.

With the help of data tracker Capital IQ, which, like BusinessWeek, is owned by The McGraw-Hill Companies (MHP), we looked at the companies in the S&P 500 index to get a real-world picture of which industries and companies are most clearly benefiting—and which are not—from the tax breaks and complexities of the IRS code.

The result: Most U.S. companies—336 to be exact—paid less than 35%, which is the official corporate tax rate. Not one company paid exactly 35%. And 35 companies averaged less than 10% a year. The list of tax rates range from nearly 0% on the low end to almost 400% a year, at the high point. As a group, U.S. companies paid an average 30% a year. We compiled some of the results in two tables showing the 50 companies that pay the lowest tax rates and the 50 companies that pay the highest rates. The slides that follow are the 25 lowest payers.

Our method: We looked at the companies in the S&P500 index, excluding those with two or more recent years of losses and instead of the "effective tax rate" companies calculate and apply to their income statement, pulled out the figure company's disclose as cash taxes paid. That's the closest number available in public filings to the check they wrote to the IRS. Dividing that by pretax income excluding extraordinary items, we came up with a tax rate closer to reality. REITs and companies domiciled outside the US were left off the list. To minimize the impact of one-time anomalies, we then averaged the last four years' numbers.