Willens: Why Is OfficeMax Paying Taxes Despite Tax Credits in Excess of Tax Liabilities?

Robert Willens (Robert Willens LLC, New York; Adjunct Professor, Columbia) has published Analyzing OfficeMax's Tax Profile, 121 Tax Notes 977 (Nov. 24, 2008).  Here is the abstract:

OfficeMax Inc. (OMX) is paying cash taxes each year yet at the same time is reporting a substantial amount of credit forwards that seemingly should operate to offset any tax liability that it might incur. However, that OMX is paying taxes while concurrently possessing tax credits well in excess of its tax liabilities can be explained by the fact that the credits are not the type that can be used to offset the particular tax liabilities it is generating. In short, the anomaly of a corporation paying taxes despite the existence of substantial tax credits can be explained by examining the nature of the credits that it has amassed.