Institute on Taxation and Economic Policy
Amazon, the ubiquitous purveyor of two-day delivery of just about everything, nearly doubled its profits to $11.2 billion in 2018 from $5.6 billion the previous year and, once again, didn’t pay a single cent of federal income taxes.
The company’s newest corporate filing reveals that, far from paying the statutory 21 percent income tax rate on its U.S. income in 2018, Amazon reported a federal income tax rebate of $129 million. For those who don’t have a pocket calculator handy, that works out to a tax rate of negative 1 percent.
The fine print of Amazon’s income tax disclosure shows that this achievement is partly due to various unspecified “tax credits” as well as a tax break for executive stock options.
This isn’t the first year that the cyber-retailing giant has avoided federal taxes. Last year, the company paid no federal corporate income taxes on $5.6 billion in U.S. income.
ITEP has examined the tax-paying habits of corporations for nearly 40 years and has long advocated for closing loopholes and special breaks that allow many profitable corporations to pay zero or single-digit effective tax rates. When Congress in 2017 enacted the Tax Cuts and Jobs Act and substantially cut the statutory corporate tax rate from 35 percent to 21 percent, proponents claimed the rate cut would incentivize better corporate citizenship. However, the tax law failed to broaden the tax base or close a slew of tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes on almost half of their profits.
In fact, the Trump Administration and its congressional allies included lavish new giveaways such as immediate expensing of capital investments. Multiple analysts scored the tax law as a huge revenue loser, giving away far more to big corporations in rate cuts than it takes in loophole-closers.
Amazon is no stranger to tax controversies. Last year the company, in a staggering act of hubris, engaged in a year-long aggressive push for huge new relocation subsidies for its “HQ2” headquarters. A year later, Amazon appears to have won its two-front battle against fair taxes by continuing to altogether avoid federal taxes and obtaining lucrative packages of local tax breaks for not one but two new HQ2 locations, in New York and Virginia as well breaks for an operations center in Nashville, Tenn.
And #PoorBezos has the unmitigated gall to demand subsidies from this state and city and to go after Trump with the national/his personal newspaper that he owns. What a insecure and sad greedy little miser.
12 comments:
Some basic questions about the Amazon scam (that were never really answered to us plebes):
The wording was always “up to” 25,000 jobs. Nowhere did it specify if these would be at-once employed or those that would cycle through that ten year period.
Were the breaks and incentives ever contingent on employment? Or was this more of the usual corporate welfare.
Was Amazon willing to kick-in anything to directly help the inevitable added loads to the subways (which I take out there several times a week) or schools that are already overcrowded and will need improvement if we expect those employees to stay and put down roots.
On a personal note, it was embarrassing to see our mayor and governor prostrate themselves to this company. It also set a bad precedent given that other major tech co’s are already locating and expanding here while (usually) asking for no such breaks.
Rob in Manhattan
Just think Gianaris, the Albany errand boy for the Vallonians has finally done something big. Take a look at his district. Who needs Amazon when you have Pistilli putting up highrises, and the hideous garbage going up under the 31st St el and off Astoria Blvd.
Take a look at the other areas in Queens that a changing with their new buildings put up by illegals, designed by illegals, and housing illegals. Look at Jamaica. Look at Flushing. Look at Queens Blvd. That is what we need for LIC. Right? Barracks for waitstaff of the rich in Manhattan and voters for the Democratic Party. That is the world of Gianaris, Van Bramer, and AOC.
I also think its time some big money comes in here to cleanse us and run some people that have common sense and a vision of the bigger picture - things NYC desperately needs. Less than 5 people have done this to us. And they talk of Trump. Ha!
How much was spent wooing Amazon? And the promised tax incentives... to create jobs... so the WORKERS could be taxed. This is improving the economy?
Good article.
Now let's give the giants a taste of reality. How much money is this country really losing in tax dollars?
Fact is that Amazon is one of the leading businesses in the world and it created more jobs that any socialist in the US or outside. NYC has lost 25.000 jobs because of bunch of lunatics. That's the only thing that matters...
So, how does this square with the opinion that LIC should have tried to keep Amazon? Would the jobs and general economic stimulation make up for 3 billion in tax credits AND the unlikelihood that we would ever see tax revenue from them?
The fact is Amazon has a track record of creating jobs and generating income.
The people that blocked this have a record of bullsh!t - empty campaign promises and coddled by a lovie-dovie press. Go ahead, call any one of them about the development that is plaguing YOUR block. Then tell their reaction that they ignored you the Queens Press. They will do nothing. Fees from campaign ads are important you know.
Remember that all those politicians were part of this until they discovered they did not get a cut. THAT is what has them p!ssed. Not YOUR interests. And they threw away billions from your community to prove their sorry-@ssed egos. Your plight does not matter - and you just swallow their bullcrap as you are trained to do.
Amazon has a track record of creating part-time warehouse fulfillment jobs with hourly quotas. They haven’t really made money like Google. Bezos is interested in conquering as many sectors such as retail which he sees as highly strategic but Amazon from my understanding does a poor job explaining their earnings.
I do agree with your theory that many politicians when they realized they wouldn’t get political donations from Amazon which was Amazin’s Arrogance once they thought I presume they thought they had DeBlasio and Cuomo “bought off “ as both have Presidential aspirations and political patronage would definitely help.
It’s sad those not even living in Queens let alone NY state go on social media and attack AOC and the NY liberals for turning down thousands jobs or whatever Amazon claims and average salary of $150,000 which is ridiculous.
said...
Fact is that Amazon is one of the leading businesses in the world and it created more jobs that any socialist in the US or outside. NYC has lost 25.000 jobs because of bunch of lunatics. That's the only thing that matters...
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No. That’s a poor understanding of how jobs are created. Small businesses create more jobs than large corporations. What jobs are we talking about and did Amazon promise 25,0000 jobs? If they could provide job listings or any evidence they would actually put locals on the payroll with decent salaries I would have no problem with Amazon coming to Queens. But the face Amazon was so arrogant they pulled out showed they don’t value the deal they doubt they could now get and are trying to play hardball and set a display and warning to states that they’have jobs dangling and politicians and people like you actually need to beg on your knees for Bezos to set up shop and provide jobs.
Google purchased the entire telecom building at 111 8th Ave and purchased the building across the street. There was no objections to Google because they were creating white collar jobs and at worst making the subway lines that would be used by employees would be the only impact. Google is highly profitable not Amazon.
Amazon lost billions every year for most of their existence, so they have tax breaks based on that fact which they are using today. All legal. Just like the Donald did. However, Donald never sent pictures of his junk to Melania over the phone like Bezos did. :~) At least as far as we know.
Respect to author, some good entropy.
I am always thought about this, thank you for posting.
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