According to the report released Wednesday, the profits of Amazon, the online retail giant, soared, but the federal government did not pay income tax for the second year in a row, according to a report.
The Institute of Taxation and Economic Policy states that the company is subject to a 21% tax rate on its US income. However, through various tax breaks and credits, the corporation will receive a tax refund of $ 129 million.
This is despite the fact that the company has almost doubled its profits to reach $ 11.2 billion in 2018, compared with $ 5.6 billion the previous year, reported ITEP.
The organization explained the negative tax rate as follows: "The details of Amazon's income tax return show that this achievement is partly due to various unspecified" tax credits ", as well as tax relief for executive stock options.
An analysis of Motley Fool conducted in April 2018 revealed that Amazon was a "master of tax evasion".
CNN explains that the US tax code allows companies that are losing money to reduce their future taxable income. This has worked in favor of Amazon, because its past has been marked by billions of dollars in losses and part of its profits comes from global sources not subject to the US tax code, explains the network.
CNN notes that the company recently paid hundreds of millions of dollars in state taxes and more than $ 1 billion in international taxes.
President Donald Trump has criticized Amazon for its tax practices in the past. In March 2018, Trump tweeted that the company was paying "little or no taxes to states and local governments" and alleged that the company had abused the postal system.
In its analysis, ITEP criticized the Trump administration for the 2017 law on tax cuts and employment, which, according to ITEP, did not eliminate tax loopholes as the profitable businesses can use to avoid paying their taxes.
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