Amazon paid $0 in income taxes last year - @shutterstock | Sundry Photography
For the second year in a row, Amazon paid zero dollars in federal taxes even as it doubled its profits. That's according to a report released Institute on Taxation and Economic Policy In 2017, profit before taxes was $5.6 billion and rose to $11.2 billion last year. The U.S. statutory income tax rate is 21 percent and Amazon reported an income tax rebate of $129 million. This results in a tax rate of -1.2 percent.
In 2017, the company also received a tax deduction of $140 million, representing a tax rate of -2.5 percent. Senator Bernie Sanders was among those who criticized Amazon following the ITEP report, tweeting: “If you paid the $119 annual fee to become an Amazon Prime member, you have paid more to Amazon than it paid in taxes.”
Amazon was already in the headlines last week after it canceled plans to open a major new corporate campus in New York. The decision to delay the move was welcomed by critics, including many Democrats who opposed the huge subsidies the city was offering to lure Amazon. Mayor Bill de Blasio was an enthusiastic supporter of the campus, claiming it would have huge economic benefits and create 25,000 jobs. On Sunday, he criticized Amazon's decision to close the deal, calling it "an example of an abuse of corporate power."
For the second year in succession, Amazon has paid zero dollars in federal taxes, despite doubling its profits. That's according to a report released last week by the Institute on Taxation and Economic Policy which raised serious questions about the tech giant's tax-paying habits. In 2017, its pretax profits were $5.6 billion and they soared to $11.2 billion last year. The statutory income tax rate in the US is 21 percent and Amazon reported an income tax rebate of $129 million. That works out at a tax rate of -1.2 percent.
In 2017, the company also experienced a tax rebate to the tune of $140 million, making for a -2.5 percent tax rate. Senator Bernie Sanders was among those criticizing Amazon in the wake of the ITEP report and he tweeted that “If you paid the $119 annual fee to become an Amazon Prime member, you paid more to Amazon than it paid in taxes”.
Amazon was already in the headlines last week after it axed plans to open a major new corporate campus in New York. The decision to shelve the move was welcomed by critics, including many Democrats, who were against the huge subsidies the city was offering to lure Amazon. Mayor Bill de Blasio was an avid supporter of the campus, claiming it would have huge economic benefits and create 25,000 jobs. On Sunday, he criticized Amazon's decision to pull the deal, calling it “an example of an abuse of corporate power”.
No taxes despite billions in profits
Amazon has $10.8 billion in pre-tax profit (before deducting US federal taxes) in its books for 2018. The company still doesn’t have to pay taxes – on the contrary. According to an analysis by the Institute of Taxation an Economic Policy (ITEP), the company received a tax credit of $129 million. This means that Amazon has had a negative tax rate for the second year in a row. But even in previous years, the company transferred relatively modest amounts to Washington. From 2009 to 2018, the tech giant paid taxes of $791 million on profits of around $26.5 billion - which corresponds to an effective federal tax rate of three percent.
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