As per the Institute on Taxation and Economic Policy’s report, for the second consecutive year, Amazon will pay nothing in federal income taxes and this is because of the new Tax Cuts and Jobs Act (TCJA). The federal tax responsibility of the company is 21%. As per the corporate filings, Amazon with the help of tax breaks will not be paying anything despite having a profit of $11.2 billion in 2018.
According to Steve Wamhoff, ITEP’s Director of Federal Tax Policy, It’s difficult to identify exactly what the company is doing. He added that in the company’s public documents they don’t show the tax strategy. So it’s vague to know the advantage that Amazon is taking. They unclearly say tax credits.
Although the company has possibly taken advantage of TCJA’s new breaks and loopholes, this is not the first time that Amazon has escaped from federal tax. In 2017, Amazon has reported a profit of $5.6 billion in United States profits and paid $0. An Amazon spokesperson stated that the company pays all the required taxes in the United States including every country where Amazon operates. Amazon has paid $2.6 billion in corporate tax. Wamhoff stated that Amazon’s seemingly nonexistent tax bill shows that there have always been problems with corporate tax liability. Amazon’s tax liability gets revealed by President Trump’s public criticisms on the company for not paying enough tax. Wamhoff added that the President had assured to close loopholes and end special interest breaks by his new tax law. But it’s clear that this is not the case.
Amazon is not alone. The advantages that TCJA provides to the big corporations and wealthiest Americans had always put them in criticism. Wamhoff stated that it’s ironic that slashing the corporate tax rate to 21% from its previous 35%, because the actual corporate tax rate was 21%, after accounting for loopholes and tax breaks.
