US Corporate Tax Revenue Drops 15% to $381B as AI Capex Write-Offs Offset Record Profits

US corporate income tax revenue fell roughly 15% to $381B in the fiscal year ended Oct. 1, according to data released Friday by the Treasury Department, even as corporate profits surged to record highs. The roughly $70B decline followed a similar drop the previous year, leaving federal corporate tax collections down more than a quarter compared to 2024, the final full fiscal year of the Biden administration. The revenue drop stems from tax cuts passed by Congressional Republicans and signed by President Trump in 2025, which allow companies to claim larger deductions in the same year they make new capital investments. That tax change coincided with major US technology companies spending hundreds of billions of dollars on AI projects and data centers, reducing federal tax collections more sharply than analysts had projected. Corporate executives have indicated they plan to continue increasing their AI investment spending, which could depress federal corporate tax revenue for years while widening the gap between corporate earnings and tax receipts.