For the second year in a row, online shopping giant Amazon will pay zero federal taxes, according to The Guardian, which reported that all of the company’s $11.2 billion in profits in 2018 will go tax-free.
The online shopping and tech giant scrapped plans to build a second headquarters in New York this week after a backlash over a proposed $3bn in taxpayer subsidies. Local politicians questioned why a company that made $1bn a month in the last three months of 2018 alone should be lured to New York with taxpayers’ cash.
Those critics were given more ammunition this week when the Institute on Taxation and Economic Policy (ITEP) published a report showing Amazon is not paying a single cent in taxes for the second year in a row.
How is this possible?
In 2018, Amazon nearly doubled its profits, from $5.6bn to $11.2bn. But far from paying the statutory 21% income tax rate, it reported a $129m federal income tax rebate for the year – a tax rate of -1%.
“The fine print of Amazon’s income tax disclosure shows that this achievement is partly due to various unspecified ‘tax credits’ as well as a tax break for executive stock options,” according to ITEP.
Though remarkable, Amazon is not the only company spared a tax bill: ITEP said Netflix posted its largest profit ever at $845 million but owed no state or local taxes.