Despite record profits, Amazon has not paid any federal income tax in 2017 or 2018



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"It is tax avoidance and not tax evasion." There is nothing to indicate that wrongdoing has been committed except by Congress, "said Matthew Gardner, who Research Institute at the Institute of Taxation and Economic Policy, a liberal think tank.

Amazon (AMZN) accumulated billions of dollars in losses over its two-decade history. It recorded a loss of $ 3 billion in its first eight years as a public company. It has fluctuated between profit and loss since 2003. Its most recent annual loss was $ 241 million in 2014.

Amazon's total earnings easily outweighed its losses – quite often. But part of Amazon's revenues came from sales outside the United States, where Amazon paid lower or no taxes. Other revenues were offset by Amazon's investments in equipment, such as computers and robots, in its distribution centers.

Last year, Amazon benefited from an accelerated tax credit for the purchase of equipment, which was part of the corporate tax account adopted at the end of 2017. In addition, the company benefited from credit tax for research and development. Thus, the federal tax bill of Amazon reached a net credit of $ 129 million in 2018 after obtaining a tax credit of $ 137 million in 2017.

In its most recent annual financial statements, the company has indicated that it still has a $ 1.4 billion federal tax credit to offset future tax bills.

Many companies that lose money pay little or no federal income tax. For example, General Motors (GM) Since leaving bankruptcy in 2009, he has paid little federal tax, despite record profits for several years. GM does not expect to have to pay a large federal tax in the coming years.
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Amazon, by contrast, paid $ 1.1 billion in federal taxes in 2016.

The company also paid non-federal taxes. Amazon has paid $ 533 million in state taxes and $ 1.3 billion in international taxes over the past two years.

Proponents of federal tax law argue that tax credits for past losses, equipment purchases and research and development allow businesses to invest for their future and grow.

"Amazon is a leading company and it has succeeded because it has invested a lot," said Mark Zandi, chief economist at Moody's Analytics. "Most of our policies are far too quoted – it's a policy that rewards a long-term perspective and takes a few risks, so Amazon will ultimately be a great benefit to taxpayers."

But Gardner said that Amazon's success makes these tax breaks useless.

"It's hard to see a convincing argument that they would have been stuck in their ability to create jobs if they had been forced to pay taxes like everyone else," Gardner said.

Amazon declined to comment on its federal tax payments.

The company said it would cut plans to create 25,000 jobs in New York City because of the political repercussions of the $ 1.5 billion tax incentives offered by the city and the state. The tax breaks it receives from the federal government are more valuable, but attract much less attention.
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