Report: Amazon Paid No Federal Taxes on $11.2B in Profits Last Year
Amazon.com, the e-commerce giant helmed by Jeff Bezos, the world’s richest man, paid no federal taxes on profit of $11.2 billion last year, according to an analysis of the company’s corporate filings by the Institute for Taxation and Economic Policy (ITEP), a progressive think tank. The news of the report was first publicly reported in The Washington Post, which is owned by Bezos. In fact, according to the report, due to a variety of tax credits and a significant tax break available on pay provided in the form of company stock, Amazon actually received a federal tax rebate of $129 million last year, giving it an effective federal tax rate of roughly -1 percent. It's the second year in a row Amazon has enjoyed a negative federal tax rate on a multibillion dollar profit.
According to ITEP’s analysis, from 2009 to 2018, Amazon earned $26.5 billion in profit and paid approximately $791 million in federal taxes, for an effective federal tax rate of 3.0 percent for the period. This rate is well below the statutory 35 percent corporate tax rate in effect for most of that period, as well as the 21 percent rate ushered in with 2017′s Tax Cuts and Jobs Act.
Total Retail's Take: Amazon, apparently, has doing nothing wrong when it comes to paying its taxes. According to a company spokeswoman, Jodi Seth, in a statement sent to The Washington Post: “Amazon pays all the taxes we are required to pay in the U.S. and every country where we operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years. We have invested more than $160 billion in the U.S. since 2011, building a network of more than 125 fulfillment and sortation centers, air hubs and delivery stations, as well as cloud-computing infrastructure and wind and solar farms.”
And it's true: Previous ITEP analysis has shown that between 2008 and 2015, profitable Fortune 500 companies paid an average federal tax rate of 21.2 percent, well under the 35 percent rate in effect during that period. One hundred of the companies paid zero or negative tax in at least one profitable year, and 58 of them had multiple zero-tax years while being profitable.
And like many other large corporations, Amazon reduces its effective tax rate each year using a variety of credits, rebates and loopholes, according to the ITEP report. For Amazon, the most lucrative of those was a tax break for pay given out in the form of stock options, which allowed the company to shave roughly $1 billion off its 2018 tax bill. That would represent nearly half of the total federal tax bill levied on the company’s profit of $11.2 billion.
- People:
- Jeff Bezos
- Jodi Seth