With a value of almost $800 billion, most people would assume that Amazon must have to pay a boatload in federal taxes. The reality is surprisingly different. For the 2018 tax year, during which to company pulled in $11.2 billion in profits, the retail behemoth will owe the IRS absolutely nothing.
For the second year in a row, Amazon won’t owe a cent in federal taxes. According to a report by Fortune, the retail giant nearly doubled its US profits between 2017 and 2018, coming in at $5.6 billion and $11.2 billion, respectively.
Amazon actually reported a $129 million tax break for the 2018 tax year, making the company’s tax rate -1 percent.
Many politicians have chimed in on Amazon’s non-existent tax obligation at various times, including President Donald Trump and Sen. Bernie Sanders.
“I have stated my concerns with Amazon long before the Election,” said Trump in a tweet. “Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”
“You know what Amazon paid in federal income taxes last year?” Sanders asked rhetorically in a tweet. “Zero.”
The Institute on Taxation and Economic (ITEP) policy noted that the corporation-friendly tax cuts pushed forward by the Trump administration play a big role in Amazon’s tax obligations.
According to the think tank, the 2017 Tax Cuts and Jobs Act did more than decrease corporate tax rates – lowering them from 35 percent to 21 percent – it also didn’t address “a slew of tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes on almost half of their profits.”
Between 2011 and 2016, Amazon paid an 11.4 percent federal income tax rate, which is a stark contrast to the -1 percent for 2017 and 2018.
Amazon also has a history of trying to avoid state sales taxes, making headlines last summer after the company successfully had a tax repealed by Jenny Durkan, the mayor of Seattle, that would have created additional funds to combat the city’s homelessness problem.
Many New Yorkers were also incredibly vocal when it was revealed that Amazon would receive significant tax cuts if it built its second headquarters in Long Island City.
Amazon ultimately canceled its plans to build the headquarters in New York.