From 0% to 1.2%: Amazon Lauds Its Minuscule Effective Federal Income Tax Rate
Cold Mountain TrailParticipant
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After two consecutive years of paying no federal income tax on billions in U.S. profits, Jeff Bezos’s retail giant Amazon reported in a splashy press release this morning that the company is paying taxes.
What the release oddly fails to mention is that Amazon still appears to be beating the federal income tax code like a pinata: the company’s annual financial report, which was released with much less fanfare, shows that in 2019 Amazon paid just 1.2 percent of its $13 billion in U.S. profits in federal income taxes.
In 2017, the company enjoyed $5.6 billion of federal income tax-free income and doubled it to $11 billion in tax-free income in 2018.
For 2019, Amazon paid $162 million of federal income taxes, a bit more than 1 percent of the company’s domestic profits. Since the federal income tax rate is now 21 percent, this means that instead of avoiding 100 percent of its income tax liability, Amazon appears to have avoided only 94 percent of its tax bill last year.
Possibly recognizing public ire over its tax avoidance, Amazon’s blog focuses mostly on taxes that it did not pay and taxes that it collected on behalf of others… For example, the release trumpets collecting “nearly $9 billion in sales and use taxes” last year. But note the word “collected.” Amazon merely collected sales taxes from customers and sent those tax payments to state and local governments. In fact, Amazon is a late arrival to the sales tax compliance scene. While Amazon has been collecting state sales tax in every state that levies one since 2017, the company was dragged kicking and screaming into the sales-tax-paying community over two decades, during which it made *not* collecting sales taxes the main source of its competitive advantage. And the company is still doing its best to avoid collecting local sales taxes and to avoid collecting any tax on sales made through its affiliates…
November 20, 2020 at 12:17 PM #379911Cold Mountain TrailParticipant
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Amazon founder Jeff Bezos says he will give $791 million in grants as part of his Bezos Earth Fund to 16 organizations that are working to protect the environment https://t.co/UuUE5zLvot
— CNN (@CNN) November 17, 2020
Jeff Bezos has made $79 billion since March 16th. https://t.co/5aoAdf3Cc1
— Warren Gunnels (@GunnelsWarren) November 17, 2020
he is gonna have a hefty tax bill. oh. wait. nvm
— The Sarcoptimist (@AnimalStories4) November 17, 2020
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