By SYDNEY P. FREEDBERG
Published November 16, 2003
At tax time, Herbert M. "Tippen" Davidson Jr. always remembers something he learned from his grandfather.
"There is a very large gray area that I wouldn't sanction for my company," said Davidson, 78, chief executive officer of the News-Journal Corp. in Daytona Beach. "This place still follows the rules of my grandfather, who taught us to pay our taxes on time and to the penny."
Davidson is the third generation Davidson to run the privately held News-Journal, the only remaining family-operated paper in Florida. It has a circulation of 102,184 daily and 119,521 on Sunday.
The newspaper employs about 850 people and has a payroll of about $28.5-million. With revenues of between $50-million and $100-million, it paid what some might consider more than its fair share of income taxes to the federal government and the state last year: 37.9 percent of its pretax income.
While the company wouldn't provide profit figures, it said it paid $487,932 in state income taxes.
"We don't discuss tax avoidance around here," Davidson said. "We don't have any tax staff. We don't have tax experts."
Davidson likes having police officers on the street, teachers in the classroom and operators answering 911. He said he's willing to pay for the services through taxes.
"A tax system that doesn't supply enough money to run the place is an insane thing to have," Davidson said, blaming antiquated tax rules and a meltdown in corporate ethics.
"It p--- me off that so many loopholes exist," he said. He bemoaned multistate corporations, including some chain-owned newspapers, that don't contribute to the communities where they do business.
"Some don't care about the state," he said. "Their sole purpose is to make money."
While the News-Journal said it takes all appropriate federal and state deductions, it is philosophically opposed to what David Kendall, the company's chief financial officer, calls "aggressive tax avoidance devices."
"Being a newspaper and reporting on other companies in our market and their business dealings, we feel we need to be beyond reproach in our business dealings, and therefore pay our fair share of taxes," he said.
