The statement also mentioned Amazon's investment and job creation in the United States. Watch the video above for more on Amazon and America's corporate income tax rate.
First, a quick look at Amazon ’s financial statements shows it doespaytaxes. In 2017, Amazon paid close to $1 billion in income tax.
In 2018, the amount jumped to $1.18 billion, accounting for local, state, and international taxes. Nor should you forget the taxes paid by Amazon ’s employees on their wages.
Not only is that direct revenue to various levels of government, but the incidence of those taxes falls somewhat on Amazon, which now must pay higher wages to offset the tax burden faced by their employees,” Cohen adds. It is true that in the last two years, Amazon did not pay federal taxes.
A more thorough examination of the underlying economics demonstrates that only looking at Amazon's profits versus corporate taxes is too simplistic of a model. Incentives, to an economist, operate as a lever to generate a better result which offset the cost.
Amazon invests heavily in research and development and therefore benefits from the tax credit. In 2017, as Decode stated, Amazon topped the list of U.S. companies in R&D spend, at $22.6 billion.
Amazon ’s investment in property, plant, and equipment also makes it eligible for tax credits. Amazon largely pays no corporate tax precisely because it reinvests those profits into its operations.
Under a scenario where Amazon had no corporate tax breaks, it would disincentive the company from reinvesting and thus creating greater opportunity for the businesses and cities in which it operates. Raising a pitchfork to fight Amazon's corporate tax breaks is fine if the argument is rooted in strong economic reasoning.
PHOTO: DON Emmett/AFP/Getty Images Dr. Michael Pet of the University of Maryland's Center for Advanced Life Cycle Engineering looks at an AmazonBasics microwave from a customer who said it caught on fire.
The more than 1 million square feet facility holds tens of millions of products, features more than 14 miles of conveyor belts, and employs more than 4,000 workers who pick, pack, and ship orders. Tomorrow Amazon will host a job fair to hire 50,000 positions in their fulfillment centers nationwide.
But for the first time since 2016, Amazon's critics won't be able to point to the tech giant's nonexistent federal tax bill. After two straight years of paying $0 in U.S. federal income tax, Amazon was on the hook for a $162 million bill in 2019, the company said in an SEC filing on Thursday.
Amazon has been the subject of much criticism over the fact that the company's final federal tax burden has been particularly lacking in recent years. The company also came under fire for seeking huge tax incentives worth billions of dollars as part of its search for a second headquarters, or “HQ2,” in 2018.
In February 2019, Senator Bernie Sanders pointed out in a tweet that any one of the company's roughly 150 million Amazon Prime members would have paid more for that program's annual fee ($119) than Amazon paid in federal taxes for 2018 or 2017. In a blog post on Thursday, Amazon touted the fact that the company had “over $1 billion in federal income tax expense” in 2019.
And, the company notes in its blog post that Amazon also paid roughly $2.4 billion “in payroll taxes and customs duties” in 2019. “The clear fact remains that the federal income tax system still can hardly lay a glove on one of the biggest and most profitable corporations in the world,” Gardner writes on his blog post.
In 2018, the company made over $200 billion in sales, but paid no money to the U.S. government in the form of income tax (in fact, the government actually owed the company some $129 million as noted in parentheses in the chart below): However, the company did pay taxes abroad and at the state level: 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,” an Amazon spokesperson told Yahoo Finance in February 2019.
Stock-based compensation refers to the fact that publicly traded corporations, like Amazon, can list the stock options they grant to employees as a business cost in their accounting, and if an option-receiving employee makes over $1 million a year in salary, the profits from the sale of those stocks can then be counted as a federal income tax deduction for the corporation. Regardless, it is factually true that Amazon paid nothing in federal income tax in 2018.
A spokesperson for Delta did not immediately respond to a request for comment. A spokesperson for GM did not immediately respond to a request for comment.
A U.S. flag flies at a Goodyear Tire facility in Somerville Reuters 2018 US income : $440 million A spokesperson for Goodyear did not immediately respond to a request for comment.
A spokesperson for IBM did not immediately respond to a request for comment. A spokesperson for JetBlue did not immediately respond to a request for comment.
A spokesperson for Netflix did not immediately respond to a request for comment. The spokesperson added that the company's taxes lowered following the sale of its production mail business last year.
Ryan Young for Business Insider 2018 US income : $800 million *In its report, the Institute on Taxation and Economic Policy notes that some companies' vague language in their 10-K annual financial filings makes it difficult to calculate the exact size of their rebates.
Step notes that Salesforce disclosed $132 million in “tax credits,” but doesn't go into more detail. A spokesperson for Salesforce did not immediately respond to a request for comment.