Tags: amazon | itep | tax | donald trump

Analysis: Amazon Paid Zero Tax, Got $789 Million Windfall

Image: Analysis: Amazon Paid Zero Tax, Got $789 Million Windfall
Jeff Bezos, founder of Amazon, attends the 75th Annual Golden Globe Awards in Beverly Hills in January. (Photo: Alberto E. Rodriguez/Getty Images)

By    |   Tuesday, 27 February 2018 01:15 PM

Amazon reported $5.6 billion in U.S. profits in 2017, but didn’t pay any federal income taxes because of various credits and breaks for executive stock options, according to an analysis by the left-leaning Institute on Taxation and Economic Policy.

“The online retail giant has built its business model on tax avoidance, and its latest financial filing makes it clear that Amazon continues to be insulated from the nation’s tax system,” Matthew Gardner, a senior fellow at ITEP, said in a blog post.

President Trump also has singled out Amazon for criticism, blaming the e-commerce giant in a tweet for “doing great damage to tax-paying retailers” and killing jobs in cities, USA Today reported in August. Trump’s attacks on Amazon are politically motivated because the company’s founder Jeff Bezos also owns The Washington Post, whose editorial page has been especially critical of the president.

But in another twist, Trump’s tax reform will help Amazon receive an additional tax credit.

“Incredibly, Amazon’s corporate tax goose egg for 2017 doesn’t include the effect of a second big tax disclosure: the $789 million one-time tax break the company projects it will receive due to the new tax law,” ITEP’s Gardner said. “Instead of paying these deferred taxes at the previous 35 percent rate, Amazon now gets an extra reward for postponing the taxation of this income: a 40 percent discount from 35 to 21 percent.”

Gardner cautioned municipalities to be wary of how many tax giveaways they grant Amazon to lure the company to build a second headquarters outside of its home base in Seattle.

“Amazon’s sales tax dodging has pushed brick and mortar retailers to the brink of extinction, and its spectacular federal corporate tax avoidance is very likely mirrored at the state level,” Gardner said. “For states contemplating tax incentives for Amazon, the salient question is: what do you give a tax avoider who already has everything?”

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Amazon reported $5.6 billion in U.S. profits in 2017, but didn't pay any federal income taxes because of various credits and breaks for executive stock options, according to an analysis by the left-leaning Institute on Taxation and Economic Policy.
amazon, itep, tax, donald trump
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2018-15-27
Tuesday, 27 February 2018 01:15 PM
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