Amazon Will Pay a Whopping $0 in Federal Taxes on $11.2 Billion Profits

[millefleur 5,046]

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Those wondering how many zeros Amazon, which is valued at nearly $800 billion, has to pay in federal taxes might be surprised to learn that its check to the IRS will read exactly $0.00. According to a report published by the Institute on Taxation and Economic (ITEP) policy Wednesday, the e-tail/retail/tech/entertainment/everything giant won’t have to pay a cent in federal taxes for the second year in a row. This tax-free break comes even though Amazon almost doubled its U.S. profits from $5.6 billion to $11.2 billion between 2017 and 2018. To top it off, Amazon actually reported a $129 million 2018 federal income tax rebate—making its tax rate -1%.

 

Amazon’s low (to non-existent) tax rate has been chided by politicians ranging from Senator Bernie Sanders to President Donald Trump.

 

But even though Trump previously blasted Amazon for its limited state taxes—a single presidential tweet caused the company’s shares to fall by 9%—ITEP notes that its non-existent federal tax payment is a result of the Trump Administration’s corporation-friendly tax cuts. The think tank writes that the 2017 Tax Cuts and Jobs Act not only decreased corporate tax rates from 35% to 21%, but it also didn’t 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.”

 

According to The Week, Amazon ended up paying an 11.4% federal income tax rate between 2011 and 2016, which is a contrast to the -1% rate this year. Amazon has a history of avoiding various sales taxes and made headlines last summer after successfully convincing Seattle Mayor Jenny Durkan to repeal a tax that would have helped the city’s homeless population.

Via Fortune

 

The Amazon saga continues...Trump lambasts Amazon for paying too little taxes, then passes tax cuts that allows Amazon to pay even less... 🤷‍♀️

[spookyturtle 9,465]

The winning continues. 

[Voice of Reason 10,298]

Doesn’t add up.  How can a company who was paying 91% taxes 4 short years ago be paying 0% last year (BEFORE the tax cuts) and 0% in 2018?  

[jg121783 3,915]

8 hours ago, spookyturtle said:

The winning continues. 

Yes the winning from the Obama years when large companies like GE paid no taxes continues. Only this time it's Amazon. This is winning Obama can actually take part of the credit for. Anyways from what I have read (not sure how true it is) the reason Amazon paid no taxes has to do with the way they invested their profits in new warehouses.

[Dashinka 24,488]

Everybody does understand that corporations don’t pay taxes right?

[spookyturtle 9,465]

3 hours ago, jg121783 said:

Yes the winning from the Obama years when large companies like GE paid no taxes continues. Only this time it's Amazon. This is winning Obama can actually take part of the credit for. Anyways from what I have read (not sure how true it is) the reason Amazon paid no taxes has to do with the way they invested their profits in new warehouses.

As long as that makes you feel better about your idol. 

[Lemonslice 4,836]

23 minutes ago, Bill & Katya said:

Everybody does understand that corporations don’t pay taxes right?

They do... corporate taxes are certainly a thing, Rate is about 21%.

 

 

[jg121783 3,915]

30 minutes ago, spookyturtle said:

As long as that makes you feel better about your idol. 

If you are referring to Trump that is far from the case. I have been critical of some things he has done recently and honestly I am on the fence regarding whether or not he will get my vote in 2020 (though I have yet to see a viable alternative). As far as Amazon not paying taxes goes I am not trying to defend that. In fact I think it is wrong. I was simply stating the justification some have cited for that. However if you want to pin this on Trump it is disingenuous to glaze over the fact that many large corporations such as GE paid little to no taxes under Obama.

[spookyturtle 9,465]

1 hour ago, Bill & Katya said:

Everybody does understand that corporations don’t pay taxes right?

Of course we do, but when they don’t pay under a Democrat President it’s bad, but when they don’t pay under a Republican it’s OK. 

[Steeleballz 7,550]

11 hours ago, ALFKAD said:

Doesn’t add up.  How can a company who was paying 91% taxes 4 short years ago be paying 0% last year (BEFORE the tax cuts) and 0% in 2018?  

 

  Where did that number come from?

[Voice of Reason 10,298]

3 hours ago, Bill & Katya said:

Everybody does understand that corporations don’t pay taxes right?

Not true.  They DO pay taxes, but it differs slightly from personal income taxes.  What is the same is that the corporation will try to maximize deductions to lower taxes paid, like we all do.  That's why I find it hard to believe that Amazon paid zero percent when they are so profitable. But we will know for sure in a few months.  This OP is far too early in the year to speculate what taxes Amazon pays.

 

For your reading enjoyment...

https://articles.bplans.com/how-corporations-are-taxed/

[Voice of Reason 10,298]

40 minutes ago, Steeleballz said:

 

  Where did that number come from?

Can't find the link I looked at yesterday, which showed an EITR of 91%, but this one looks legit, and shows them paying 10.63% in 2018, and just over 60% in 2015.

 

I searched for Amazon historical tax rate.

[Voice of Reason 10,298]

This site says their EITR has ranged from a low of 2.84% last June, to a high of 76.5% in 2013.  

 

https://www.stock-analysis-on.net/NASDAQ/Company/Amazoncom-Inc/Analysis/Income-Taxes#EITR

 

I'm betting the site I read last night was taxed income BEFORE deductions, it's the only thing that makes sense to me.

[Steeleballz 7,550]

36 minutes ago, ALFKAD said:

Can't find the link I looked at yesterday, which showed an EITR of 91%, but this one looks legit, and shows them paying 10.63% in 2018, and just over 60% in 2015.

 

I searched for Amazon historical tax rate.

 

   Sixty percent is still crazy though. Then again so is 0%.  

 

   The biggest problem we have with this is the complexity and the sheer amount of pork that has been written into the tax code over the years. Before they make any more changes to marginal rates or income tiers, they really need to clean up and completely overhaul the existing code. Obviously a corporation the size of Amazon is not ever going to be something simple to address, but for 98% of us, it should be back to a straight forward, predictable system that doesn't have a bazillion loop holes to mess around with. 

[jg121783 3,915]

2 hours ago, spookyturtle said:

Of course we do, but when they don’t pay under a Democrat President it’s bad, but when they don’t pay under a Republican it’s OK. 

I don't recall anyone saying that. I do recall some pointing out how bad Trump is for Amazon paying no taxes while failing to mention large corporations paying no taxes under Obama however.

 

8 minutes ago, Steeleballz said:

 

   Sixty percent is still crazy though. Then again so is 0%.  

 

   The biggest problem we have with this is the complexity and the sheer amount of pork that has been written into the tax code over the years. Before they make any more changes to marginal rates or income tiers, they really need to clean up and completely overhaul the existing code. Obviously a corporation the size of Amazon is not ever going to be something simple to address, but for 98% of us, it should be back to a straight forward, predictable system that doesn't have a bazillion loop holes to mess around with. 

I think the best solution is a flat rate across the board with a certain amount for household expenses being tax free. For example set the flat rate at 15% and have the first 50k for single people and 100k for families be tax free. It's simple and fair for everyone. We don't need a tax code so complex that there isn't a single person on Earth that knows or understands it all.