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ABC Supply owner paid no income taxes for 3 years (UPDATE)

Associated Press

MADISON, Wis. (AP) — The richest woman in Wisconsin paid no state income taxes from 2012 through 2014.

Billionaire Diane Hendricks paid no taxes because of the way her corporation, Beloit-based ABC Supply Co., is organized, the company’s tax director, Scott Bianchini, told The Associated Press. He said she did pay $7.6 million in state income taxes for 2015.

“Diane Hendricks and ABC Supply have paid hundreds of millions of dollars of federal and state income taxes over the years in question,” Bianchini said.

The figures were first reported Thursday by the Milwaukee Journal Sentinel.

Hendricks is a longtime backer of Republican Gov. Scott Walker and vice chairwoman of a fundraising committee for Donald Trump.

Bianchini said Hendricks didn’t pay taxes over the years in question because ABC was organized as a C corporation, but she did last year when it was organized as an S corporation.

“It’s that simple,” he said.

Hendricks, 69, was named “America’s Richest Self-Made Woman” by Forbes Magazine this month, which estimated her net worth to be nearly $5 billion. She and her husband co-founded the roofing supply company, which has since grown into the nation’s largest, in 1982.

In May, Hendricks was named to the Trump Victory leadership team, which is raising money for his presidential run. She was named to the team by Wisconsin native Reince Priebus, chairman of the Republican National Committee.

Hendricks has given $5 million to a super PAC that supported Walker’s run for president and $500,000 to his 2012 recall campaign. It was Hendricks whom Walker was talking with when he was caught on tape saying he planned to use a “divide and conquer” strategy against unions, just before releasing his proposal in 2011 that effectively ended collective bargaining for most public employees.

Walker, when asked Thursday by the Journal Sentinel about Hendricks’ not paying taxes, said that’s an issue on the federal level because state income taxes are based on federal tax returns. Walker said his goal is to lower taxes for the middle class. When the Journal Sentinel asked what kind of a message it sends to the middle class when a billionaire like Hendricks pays no income taxes, he said, “It’s not because of things that we’ve done.”

Accountants Joel Joyce and Christa Baldridge told the newspaper that it isn’t unusual for a wealthy person to end the year with zero tax liability and then have a tax bill the following year. Among the reasons why could be investment losses, various deductions or credits, or tax losses from a previous year that are used against income earned in a later year.

Bianchini said Hendricks was on vacation and not available to comment.

“I have known Diane for over 25 years,” he said. “She and ABC do not shirk income tax obligations. I personally guarantee that. The inference that paying hundreds of millions of dollars in federal and state income taxes, over a five-year period, is somehow insufficient or improper is absurd.”

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