For the second year in succession, Amazon has paid zero dollars in federal taxes, despite doubling its profits. That’s according to a report released last week by the Institute on Taxation and Economic Policy which raised serious questions about the tech giant’s tax-paying habits. In 2017, its pretax profits were $5.6 billion and they soared to $11.2 billion last year. The statutory income tax rate in the U.S. is 21 percent and Amazon reported an income tax rebate of $129 million. That works out at a tax rate of -1.2 percent.
In 2017, the company also experienced a tax rebate to the tune of $140 million, making for a -2.5 percent tax rate. Senator Bernie Sanders was among those criticizing Amazon in the wake of the ITEP report and he tweeted that “If you paid the $119 annual fee to become an Amazon Prime member, you paid more to Amazon than it paid in taxes”.
Amazon was already in the headlines last week after it axed plans to open a major new corporate campus in New York. The decision to shelve the move was welcomed by critics, including many Democrats, who were against the huge subsidies the city was offering to lure Amazon. Mayor Bill de Blasio was an avid supporter of the campus, claiming it would have huge economic benefits and create 25,000 jobs. On Sunday, he criticized Amazon’s decision to pull the deal, calling it “an example of an abuse of corporate power”.