Facebook avoids taxes, gets $429M refund

Social networking site uses stock options as write-off

POSTED: 7:20 AM PST February 18, 2013    UPDATED: 2:17 AM PST February 18, 2013 
Facebook Mark Zuckerberg
(CNN) -

A tax watchdog group says Facebook will pay no state or federal taxes on its profits for 2012 -- and will even get $429 million refund.

Citizens for Tax Justice says it found in Facebook's annual earnings report, the social network won't owe any taxes on its $1.1 billion in pre-tax profits for last year.

That's according to a story in Bloomberg Businessweek.

The tax research group says Facebook is using stock options and other forms of compensation to investors and employees for the write-off.

Analysts say the move is legal, and related to the company's decision to go public last year.

A Facebook spokeswoman contacted by Bloomberg Businessweek declined to comment on the tax break, but pointed out tax benefits were discussed on a recent analyst conference call.