Amazon earned more in 2018 after recording over $11 billion additional profits last year. This means, the company doubled its earnings but it was revealed that it will not be paying income taxes and this is legal.
According to the Institute on Taxation and Economic Policy, with the zero tax balance, Amazon managed to skip paying taxes for two consecutive years since last year. The report explained that the government required 21 percent income tax from businesses but Amazon stated a federal income tax rebate of $129 million so when computed, it has a negative 1 percent tax to pay.
Moreover, ITEP pointed out that the fine print of Amazon's income tax disclosure reveals that this feat is, to a certain extent, attributable to the tax break for executive stock options and unspecified tax credits. It added that the leading retailing company also avoided paying federal taxes last year despite the firm's filing of $5.6 billion in profits.
Now, as Amazon is able to continuously enjoy very low to zero tax dues, many politicians in the U.S. hit the company for not paying what is supposed to be due to them. When it was reported that Jeff Bezos' company has zero due in its $5.6 billion income last year, Donald Trump shared what he thinks about Amazon's taxes.
On Twitter, he wrote, "I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!"
At any rate, from 2011 to 2016, Amazon reportedly paid its income tax dues at a rate of 11.4 percent. It should be noted that this is much lower than the imposed national rate of 35 percent and this was what the U.S. president was talking about.
Ironically, Amazon's was able to enjoy lower to no tax because of President Trump's corporate-friendly tax cuts. His new tax reform legislation reduced corporate tax rates from 35 to only 21 percent and this was implemented as an incentive for businesses so they can keep their money in the U.S. rather than depositing them overseas to avoid IRS. Apparently, Amazon is taking advantage of this tax regulation to evade paying.
Finally, Fortune reported that Amazon has a long history of exploiting the bureau in order to get favors that do not deserve and obtaining money from the public for its own gain and steering clear of its tax obligations. It was said that the company is actually doing this scheme as early as 1990s.
