Amazon (AMZN) will pay nothing in federal income taxes for the second year in a row, according to a report from the Institute on Taxation and Economic Policy (ITEP).
Thanks to the GOP’s new Tax Cuts and Jobs Act (TCJA), Amazon’s federal tax responsibility has fallen to 21% compared to 35% in previous years. But according to corporate filings, Amazon won’t be paying a dime in taxes despite posting more than $11.2 billion in profits in 2018 thanks to large tax breaks.
“It’s hard to know exactly what they’re doing,” said Steve Wamhoff, ITEP’s Director of Federal Tax Policy. “In their public documents they don’t lay out their tax strategy. So it’s unclear exactly which breaks [the company is taking advantage of]. They vaguely say tax credits. One could think of many different ways a corporation could do this, like the depreciation breaks which were expanded under TCJA.”
Yahoo! Finance notes: “Though Amazon might have taken advantage of new breaks and loopholes available under TCJA, this isn’t the first year that Amazon has avoided paying federal tax. The company reported $5.6 billion in U.S. profits in 2017 and paid $0 last year as well.”
“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,” an Amazon spokesperson said in a statement.
According to Wamhoff, Amazon’s apparently nonexistent tax bill highlights that there have always been issues with corporate tax liability.
“The thing we would need to know is would they have had positive corporate income tax liability were it not for TCJA?” Wamhoff asked. “Maybe. It’s hard to tell.”