Zoom, the popular video-conferencing platform, was one of the major beneficiaries of the pandemic as millions around the globe became dependent on video calls to stay connected and carry out their jobs.

2020 was a wild year for Zoom, wherein its annual pre-tax profit soared from just $16 million to $664 million in the span of 12 months. For that year, the company reported $2.7 billion in revenue, over 4x its revenue in the previous year.

Now, it’s been revealed that Zoom only had to cough out a relatively minute sum to the US taxman despite its year of record profits. The company paid $0 in federal income taxes and only $5.7 million in total taxes to the US government in 2020, an effective tax rate of just 0.8% on its profits even though the corporate tax rate was 21% for 2020.

• It’s not that Zoom broke the law or evaded taxes to reduce its federal income tax bill to nothing and total tax bill to $5.7 million. What the company did was take advantage of a legal loophole by compensating its executives extensively with stock payments and deducting expenses from that.

• Issuing stock payments to record as expenses isn’t the only way for companies like Zoom to minimize their tax bills. There also exists tactics like the use of R&D credits and accelerated depreciation.

• On the face of it, compensating executives extensively with stock options and awards seems like a way for a company to write off, for tax purposes, big expenses that far exceed the actual cost of its operations. To that, Zoom bestowed its executives with $302.4 million of stock-based compensation in 2020, compared to $32.1 million the year before.

• Zoom’s tax situation was orchestrated under the leadership of its CEO Eric Yuan, who has been the biggest beneficiary of the company’s surging business as its largest shareholder. Thanks to surging Zoom shares, he controls a fortune estimated at $15 billion according to Forbes.

Zoom’s case has once again drawn the ire of many including the prominent US Senator Bernie Sanders on corporations using legal loopholes to avoid taxes as they call for such loopholes to be closed.

“If you paid $14.99 a month for a Zoom Pro membership, you paid more to Zoom than it paid in federal income taxes even as it made $660 million in profits last year – a 4,000 percent increase since 2019. Yes. It’s time to end a rigged tax code that benefits the wealthy & powerful,” Sanders tweeted Sunday.

To that, the problem here apparently lies in the legal loopholes adopted by corporations to minimize their tax bill and pay at a much lesser rate than individuals. We can say it’s up to the politicians and administrations in charge of orchestrating these laws and the citizens voting them into power.

But then, corporations are known to spend heavily on lobbying in the US with the advantage of having much more money and thus much more influence than the average citizens in crafting tax laws. It’s apparent that some big corporations have an upper hand over both individuals and smaller businesses in influencing tax laws across their vicinities.

Zoom isn’t even alone in the midst of technology companies making use of legal loopholes to minimize their tax bills. We can see that it’s merely following the footsteps of tech giants like Amazon, Alphabet, Apple, and Microsoft which have a long history of doing similar things.

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