That amounts to a 1.2% tax rate for the tech giant. However, the company asserts that it has paid billions in taxes. The 1.2% is more than the 0% paid in taxes for the $11 billion in profit made during 2018. Amazon has defended the amount the corporation pays in taxes.
“We follow all applicable federal and state tax laws, and our U.S. taxes are a reflection of our continued investments, compensation of our employees, and the current tax rules,” Amazon wrote.
Additionally, in the company’s 10-K filing, $914 million in federal income taxes was deferred. Deferred taxes are those whose payment have been pushed to a later date. The balance sheet will still reflect those deferred taxes as your obligation for that year. Hence the reason why Amazon defends their balance sheet of over $1 billion in taxes despite only paying $162 million.
Amazon’s tax obligations have also decreased since President Trump’s tax reform. The Tax Cuts and Jobs Act reduced Amazon’s corporate tax rate from 35% to 21%. However, Amazon is not meeting that decreased obligation. If it had paid the 21% tax rate in full, it would have paid $2.8 billion in taxes.
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