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How Does Amazon Get Away With Not Paying Any Federal Taxes?

How Does Amazon Get Away With Not Paying Any Federal Taxes?

By Ryan Velez

When it comes to money, Jeff Bezos and Amazon are making out like bandits. The richest man in the world commands a personal net worth of $108 billion, and last year, his company brought in $5.6 billion in U.S. profits. This makes Splinter News’ report that it essentially managed to pay zero federal taxes last year so surprising.

Amazon is projecting a $789 million windfall from the Republicans’ tax bill, according to the Institute on Taxation and Economic Policy, which may have factored into its reason for withholding taxes this year. But that still doesn’t cover all the tax money that they should be paying. The real reason goes to its corporate headquarters, which isn’t in Seattle, but the small country of Luxembourg. It’s not all sunshine, though, as the European Union has accused Luxembourg of giving illegal tax breaks to Amazon and has ordered the country to recover $295 million in back taxes from Amazon. Amazon used its tax benefits to essentially zero out its tax commitments. Here’s how Amazon explained this in its U.S. Securities and Exchange Commission filing:

“Our provision for income taxes in 2017 was lower than in 2016 primarily due to excess tax benefits from stock-based compensation and the provisional favorable effect of the 2017 Tax Act, partially offset by an increase in the proportion of foreign losses for which we may not realize a tax benefit and audit-related developments.”

This isn’t Bezos’s first attempt to try and game the system. In fact, all the way back in 1995, he tried to build Amazon’s U.S. headquarters on a Native American reservation for a tax break, only to be blocked by the state of California. This knowledge puts a bit of a damper on the highly-publicized search for Amazon’s second headquarters. Many people are excited about the prospect of the headquarters bringing jobs and new life to many different communities, but these communities are bending over backward to give Bezos and Amazon tax breaks, which he clearly doesn’t need.

In comparison to other people in his income bracket, like Bill Gates, Bezos hasn’t made much of a philanthropic impact, which may ease the sting of this knowledge a bit. But in the meantime, this gives us something to gripe about while filing our taxes this month.

Source

Financial News

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