Date: April 18, 2022
Contact: mediacenter@freeandfairmarketsinitiative.org
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3 Things To Know About Amazon and Taxes
This Tax Day, we can expect Amazon to avoid paying its fair share. Time and time again, one of our nation’s wealthiest corporations has looked for ways to dodge taxes and not have to foot the bill. Meanwhile, the Big Tech company has raked in lucrative tax breaks to develop a vast network of fulfillment centers and other facilities across the country — at the direct expense of American taxpayers.
Below are three things to know when it comes to Amazon and taxes.
1. Amazon has repeatedly looked for opportunities to skirt paying federal taxes.
“The company reported a record $35 billion in U.S. pretax income for fiscal year 2021, a haul that is 75 percent more than its 2020 U.S. earnings of $20 billion. Just as notable, the company’s effective federal income tax rate of 6 percent means it avoided about $5.2 billion of federal income tax in 2021. If Amazon had paid the statutory 21 percent tax rate on its 2021 U.S. income without any tax breaks, that would have meant a tax bill of more than $7.3 billion. Instead, the company reports a current federal income tax expense of $2.1 billion.”
(Institute on Taxation and Economic Policy, “Amazon Avoids More Than $5 Billion in Corporate Income Taxes, Reports 6 Percent Tax Rate on $35 Billion of US Income,” 2/7/22)
“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. Of course, $162 million is still just a fraction of the $13.9 billion in pre-tax income Amazon reported for 2019 — roughly 1.2%, in fact. The federal corporate tax rate is 21%, but as in the past, Amazon likely employed various tax credits and deductions to reduce its federal tax bill.”
(CNBC, “Amazon had to pay federal income taxes for the first time since 2016 — here’s how much,” 2/4/20)
2. Amazon has fleeced local taxpayers by earning lucrative tax breaks that it has no need for.
“Amazon has received at least $4.7 billion in tax breaks globally during the past 10 years for warehouses, data centers, offices, call centers, and film production projects, according to a new report by a watchdog group and a global labor federation. While the vast majority of these tax breaks—$4.1 billion—are for projects in the United States, the new report tallies, for the first time, subsidies Amazon has received beyond US borders, where Amazon has aggressively built out its Amazon Prime and data center network in recent years.”
(Vice, “Amazon Has Received $4.7 Billion in Subsidies Globally, Watchdog Says,” 2/9/22)
“Amazon has been heavily expanding into areas that the government designates for special tax incentives, according to a new analysis that comes amid growing regulatory scrutiny of the e-commerce giant. The company has located delivery stations, fulfillment centers and even an air hub in “opportunity zones,” regions across the country where investors can qualify for capital gains tax breaks under a 2017 law.”
(The Washington Post, “Amazon is building warehouses in ‘opportunity zones’ that provide tax breaks and secrecy,” 12/23/21).
3. The e-commerce giant’s egregious tax schemes have attracted considerable scrutiny in recent years.
“Former Vice President Joe Biden said Amazon (AMZN) should ‘start paying their taxes’ in a broader critique of large, successful businesses. ‘I don’t think any company, I don’t give a damn how big they are, the Lord Almighty, should absolutely be in a position where they pay no tax and make billions and billions and billions of dollars,’ the presumptive Democratic presidential nominee said in an interview with CNBC on Friday.”
(CNN, “Biden wants Amazon to ‘start paying their taxes,’” 4/7/21)
“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.”
(CNBC, “Amazon had to pay federal income taxes for the first time since 2016 — here’s how much,” 2/4/20)
“Protesters repeatedly shouted ‘shame’ as a northern Virginia county board Saturday unanimously approved a $23 million incentives package for Amazon to build a new headquarters there. The Arlington County Board’s 5-0 vote came after hours of heated public testimony, news outlets reported.”
(The Associated Press, “Virginia county approves Amazon incentives despite protests,” 3/16/19)
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The Free & Fair Markets Initiative (FFMI) is a nonprofit watchdog group committed to promoting a fair, modern marketplace that works for all Americans. For more information on the Free & Fair Markets Initiative, please visit https://freeandfairmarketsinitiative.org/.
