Maybe Amazon isn't going to open up shop in New York City (the deal fell through, much to the chagrin of politicians in NYC), but they won't have to pay one red cent to the federal government on literally billions.

Amazon on top of money
© rvlsoft /

After a backlash in New York, where Amazon was set to receive a proposed $3 billion in taxpayer subsidies, local politicians figured out why a company that made $1 billion per month in the last 3 months of 2018 alone should be lured to New York with taxpayers' cash. Michael Gianaris headed the obscure state board that halted Amazon's plans. Critics like Gianaris were given more reasons to have foiled Amazon's plans when a report from the Institute on Taxation and Economic Policy (ITEP) was published documenting that Amazon isn't paying a single cent in taxes for the second year in a row.

Laughing All The Way

The Guardian reports that Amazon almost doubled its profits in 2018, from $5.6 billion to $11.2 billion. Instead of paying the statutory 21% income tax rate, the company reported a $129 million federal tax rebate for the year, dropping their tax rate to -1%. That's right – the US government basically paid taxes TO Amazon! Shouldn't it be the other way around? 

ITEP: "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." Before we all start throwing stones at Amazon, they aren't the only large corporation to enjoy a huge tax break for last year. Netflix also posted their largest profit ever ($845 million), but paid no federal or state income tax.


These corporate bonuses come after the Trump administration introduced its Tax Cuts and Jobs Act, which sharply cut federal corporate tax rates whilst expanding others. It is, plain and simply, cheaper to pay for a lobbying blitz in Washington D.C., than to pay a fair amount of taxes. It is hard to believe, but every representative in Congress has a price, and that is lower than the massive amounts of taxes these companies are supposed to pay.

Amazon's Rebuttal

In a statement that Amazon sent to the Guardian, the campany claims that it “pays all the taxes we are required to pay in the US and every country where we operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years. Corporate tax is based on profits, not revenues, and our profits remain modest given retail is a highly competitive, low-margin business and our continued heavy investment.”

If it is such a low margin business, then why not pay the corporate income tax like smaller retailers have to, as well as every private citizen?