Amazon Paid $0 in Taxes Last Year

Just this January, Amazon outperformed Microsoft as the most valuable company consequently giving its founder, Jeffrey Bezos, the title of the richest man in the world. With Bloomberg reporting a whopping market capitalization of $797 billion and a net worth of $233 billion in 2018, people expected that the company is paying its weight in taxes.

However, it has come to light that it paid $0 in income taxes last year, according to Vox. For the second consecutive year, Amazon will be sending a $0 check to the Internal Revenue Service (IRS), Fortune says.

The policies behind it

The e-commerce platform brought in a profit of $11 billion (from $5.6 billion in 2017) in the past year, bringing the amount to literally zero. This happened because of the current tax policies giving a different tax treatment to companies that offer stock-based compensation.

Moreover, Vox explains that the company is able to funnel funds towards research and development, allowing it to avail the R&D tax credit. It is also able to take advantage of President Trump’s bill, which gives companies the liberty to have a 100% subtraction when they invest in equipment. This makes its $0 tax perfectly legal, as per Vox.

Meanwhile, Fortune reveals that Amazon ‘has a history of avoiding’ a variety of taxes in sales. Aside from these credits, Amazon also filed a $129 million rebate for its 2019 federal income tax, which actually pegs its rate at -1%. Additionally, the company convinced Mayor Jenny Durkan of Seattle to repeal taxes that had the potential to aid the homeless.