Quarterly Financial Report Shows Possible Impact of Tax Law Changes

Recent changes in the tax law may have resulted in corporations experiencing variations in their profits.

The impact can be seen in the Quarterly Financial Report (QFR) released by the U.S. Census Bureau. The QFR Program publishes up-to-date aggregate statistics on the financial results and position of U.S. corporations.

Based upon a sample survey, the QFR presents estimated statements of income and retained earnings, balance sheets, and related financial and operating ratios for manufacturing corporations with assets of $250,000 and over.

It provides the same information for corporations in mining, wholesale trade, retail trade, information, and professional and technical services (except legal services) industries, with assets of $50 million and over.

In this story we are highlighting two sectors that illustrate the impact of the tax law change in the fourth quarter of 2017: the manufacturing sector saw an increase in taxes, while the information sector (NAICS 51) saw a decrease (see below).

When manufacturing sector taxes declined in the first quarter of 2018, profits increased.

The same relationship can be seen in the information sector. Taxes dropped in the fourth quarter of 2017, and net profits went up. In the first quarter of 2018, taxes went up and net profits declined.

These are just two examples of how tax changes can impact corporations’ net income after taxes.

Data for other sectors, including mining, wholesale trade, retail trade, and professional and technical services, can also be found in the QFR.

Be sure to check out the most recent QFR, released on December 4, 2018. QFR Data for the fourth quarter of 2018 is scheduled to be released on March 18, 2018.

Brooks Hurry is a survey statistician in the Census Bureau’s Economic Indicators Division.