Sen. Bernie Sanders (I-Vt.) requested the Government Accountability Office study.
The presidential hopeful said the findings reveal that "there is something profoundly wrong in America."
The report comes amid a rise in "corporate inversion" deals aimed at avoiding U.S. corporate taxes.
A new government report shows just how easy corporate America has it.
Every year from 2006 to 2012, some two-thirds of U.S. corporations did not pay federal income tax, according to a Government Accountability Office study released on Wednesday. In 2012 alone, 42.5 percent of businesses that the GAO defines as large did not pay federal taxes, including 19.5 percent of big corporations that posted a profit.
The GAO said those corporations in the black that still did not pay federal taxes benefitted from loopholes and tax incentives, such as the practice of rolling over losses from previous years. That enables companies to deduct those losses from their tax burden.
Profitable U.S. corporations paid, on average, an effective federal income tax rate of 14 percent over the slightly shorter period from 2008 to 2012, the federal government watchdog found.
Democratic presidential candidate Sen. Bernie Sanders (I-Vt.), who requested the report, immediately condemned the findings and touted legislation he has co-sponsored to curb corporate tax avoidance.
"There is something profoundly wrong in America when one out of five profitable corporations pay nothing in federal income taxes," Sanders said in a statement.
Which companies did not pay taxes in the period the study examined varied from year to year, but the findings nonetheless paint a stark picture of light taxation overall.
The findings are likely to affect an ongoing debate over corporate tax rates and the increasingly creative techniques big businesses use to avoid paying them.
The report also comes in the wake of the publication of the Panama Papers this month, a trove of leaked documents exposing massive tax dodging schemes by global leaders and businesses, which raised awareness of evasion issues.
There is something profoundly wrong in America when one out of five profitable corporations pay nothing in federal income taxes. Sen. Bernie Sanders (I-Vt.)
There has been a rash of “corporate inversions” in recent years, whereby U.S. companies acquire smaller foreign firms in order to reincorporate in countries with lower taxes.
Executives at these companies claim the top statutory corporate tax rate in the U.S. of 35 percent is so high relative to other countries, that they have little choice but to move overseas in order to remain competitive.
But the GAO study provides new support for the arguments of fair taxation advocates, who have long noted that effective corporate tax rates are much lower than the statutory rates.
Ireland, one of the most popular destinations for corporate inversions, has a corporate tax rate of 12.5 percent. That is not much lower than the 14-percent rate paid on average by profitable U.S. corporations in recent years.
However, in the United States, unlike most other countries, overseas profits are subject to domestic tax rates if corporations bring those earnings back to the country. As a result, corporations have an incentive to stash money overseas indefinitely. Avoidance techniques like inversions just enable them to get greater access to their hoarded cash.
Most other countries have what is known as a “territorial” tax system, which allows companies to pay the tax rate of the country where profit was earned.
President Barack Obama has laid out a “framework” for corporate tax reform that includes a transition to an arrangement that looks more like territorial taxation. As an interim step, the president has called for a one-time 14-percent tax rate for corporations that bring their offshore earnings back to the U.S.
Citizens for Tax Justice, a liberal group, criticized the White House’s proposed amnesty for corporations as a “wasteful giveaway to the biggest offshore tax avoiders.”
Correction: An earlier version of this story stated that one in five profitable U.S. corporations (19.5 percent) paid no federal taxes. However, this was true only of large profitable corporations in 2012 alone.