Q: I heard that Amazon did not pay any federal taxes for 2018 on billions of dollars in profit. Is this true? Are they talking about corporate taxes? What were the major deductions, expenses or incentives, if any, that led to zero taxes?
RICHARD CRISWELL, MONROE
A: The online retailer paid no federal tax in 2018 and was expected to receive a $129 million federal tax rebate, according to a February 2019 report by the Institute on Taxation and Economic Policy (ITEP), a think tank that conducted an analysis of the corporate filings by Amazon.
“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,” the report noted. “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.”
In a statement reported by numerous media outlets, an Amazon spokesperson said, “Amazon pays all the taxes we are required to pay in the U.S. 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.”
Amazon’s profits reached $11.2 billion in 2018, up from $5.6 billion in 2017, when it also did not pay federal income taxes, according to ITEP. It noted that “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.”
Q&A on the News runs Sunday, Tuesday, Thursday and Friday. Fast Copy News Service wrote this column. Do you have a question? We’ll try to get the answer. Call 404-222-2002 or email q&a@ajc.com (include name, phone and city).
About the Author
