According to a new report from Citizens for Tax Justice, Facebook will not pay any federal or state tax for the 2012 financial year, but will take in $429 million in net tax refunds.

The report cites Facebook’s recent annual financial report, and states that the social networking site, which earned $1.1 billion in U.S corporate profits last year, reduced its tax burden by taking advantage of the tax deductibility of executive stock options, linked to its initial public offering last year.

Citizens for Tax Justice claim that the accounting was hidden in the tax footnotes Facebook’s financial report and says that with one tax break Facebook saved a total of $3.2 billion in taxes.

Other reports claim that Facebook also only paid a foreign tax rate of 0.3 per cent in 2011.

Speaking to Bloomberg BusinessWeek, a Facebook spokeswoman Ashley Zandy declined to discuss the tax break while chief financial officer David Ebersman cited the accumulated tax benefits and noted that the company ended the fiscal year with nearly $10 billion in cash and investments, “giving us great flexibility and risk protection.”