In 2018, Amazon paid $0 in U.S. federal income tax on more than $11 billion in profits before taxes. It also received a $129 million tax rebate from the federal government.
Amazon’s low tax bill mainly stemmed from the Republican tax cuts of 2017, carryforward losses from years when the company was not profitable, tax credits for massive investments in R&D and stock-based employee compensation.
Jeff Bezos‘ company is not the only corporation getting money back from the federal government. For example, General Motors also reported a net federal income tax benefit in 2018. This also isn’t exactly a brand-new trend. Companies as diverse as Southwest Airlines and Goldman Sachs have also reported similar benefits in certain years since 2008.
In a statement to CNBC, an Amazon spokesperson said, “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.” The statement also mentioned Amazon’s investment and job creation in the United States.
This issue came front and center on a local and state level in New York during the saga of Amazon’s HQ2 hunt – with a groundswell of local opposition scuttling the deal.
All this begs the question: Does America have a corporate income tax problem?
Watch the video above for more on Amazon and America’s corporate income tax rate.