Amazon won’t pay a cent in federal taxes this year, according to a report by a watchdog group.
The Institute on Taxation and Economic Policy (ITEP) reports that Amazon, in fact, is getting a $129 million rebate, meaning they will effectively pay a negative one percent tax rate.
According to Business Insider, Amazon avoids paying by utilizing tax credits and exemptions built into the tax code, like credits for research and development and an exemption for taxes for executives who get paid with stocks.
The ITEP says Amazon situation shows that Congress should work to close loopholes.
The organization writes, “When Congress in 2017 enacted the Tax Cuts and Jobs Act and substantially cut the statutory corporate tax rate from 35 percent to 21 percent, proponents claimed the rate cut would incentivize better corporate citizenship. However, the tax law failed to broaden the tax base or 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.”
President Trump, who pushed the tax law changes, has also criticized Amazon for getting away with paying nothing in taxes.
Amazon, which last year became the first company to reach a valuation of $1 trillion, nearly doubled its profits in 2018 compared to the previous year, earning $11.2 billion. In 2017, the company also paid no federal taxes.
Tax breaks were one of the reasons a group of state Senators opposed bringing Amazon’s second headquarters to New York City, a move that leaders said cost New York thousands of jobs. The state was set to allow more than a billion dollar in tax breaks over a ten-year period for Amazon’s headquarters in New York.
Critics said a wealthy company like Amazon shouldn’t get any breaks, but Governor Cuomo argued that Amazon would still be paying millions in state taxes during that period and the headquarter wouldn’t be an economic gamechanger for the state.