Amazon—one of the fiercest corporate critics of Trump, and his tax cuts—raked in over $5.6 billion in earnings without paying anything in federal income taxes in 2017.
The behemoth’s annual financial report reads like a dream, and it’s also enjoying some nice tax breaks at the state and local level, too.
At the end of the day, after adjusting estimates for taxes deferred under the previous 35 percent corporate tax rate to be in line with the new 21-percent rate, Amazon saves an estimated $789 million.
Based on its 10-K form, it will end up paying about $769 million in taxes for the year, but $724 million of that will be in foreign taxes, according to the Institute on Taxation and Economic Policy (ITEP).
This isn’t to say that Amazon was paying much in taxes prior to Trump’s cuts.
In fact, ITEP claims: “During the previous five years, Amazon reported U.S. profits of $8.2 billion and paid an effective federal income tax rate of just 11.4 percent. This means the company was able to shelter more than two-thirds of its profits from tax during that five-year period.”
Despite all this, Amazon CEO Jeff Bezos is no friend to Trump—and the feeling is mutual, despite Trump’s assistance in helping Amazon clear $0 federal income taxes:
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Bezos, for his part, has tried to distance himself from Trump’s tax cuts and even went as far as to ask his Twitter followers for help figuring out a way he can give back.
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Any way you slice it, this year, too, will be a stellar one for Amazon. It’s aggressively expanding and taking on new frontiers, and it’s always on the lookout for good tax breaks—but who isn’t?
In 1996, Amazon tried to build its U.S. headquarters on a Native American reservation near San Francisco because it offered a tax break, but the project was prevented by the authorities. Related: The Fascinating Interplay Between Gold And The U.S. Dollar
Today, it’s looking for a new home in the U.S. for its second headquarters, and the projected price tag is $5 billion. States are lining up to lure in the giant (with tax breaks, of course), with 238 cities submitting proposals last year, and 20 finalists announced in a January shortlist.
In February, Amazon reported better-than-expected Q4 results as global sales in the crucial holiday quarter jumped 38 percent to $60.5 billion. Its U.S. revenue jumped 42 percent to $37 billion, while international sales grew 29 percent to $18 billion.
In 2017, more than 5 billion items were shipped with Prime around the world. Even Alexa—Amazon’s voice-enabled personal assistant, surprised with its sale success.
Amazon recently opened its first cashier-less store called Amazon Go, which gives us a glimpse of what our retail future will resemble. No lines and no check-out. Take what you need, and artificial intelligence does the rest.
Also last year, the company launched two furniture brands called Rivet and Stone & Beam, and now it’s eyeing yet another industry: health care, for which it is partnering with Warren Buffett's Berkshire Hathaway and JPMorgan Chase in an effort to tackle health care costs.
It’s not going for a simple retail monopoly anymore … and cash windfalls and zero-sum tax breaks mean there’s no stopping it now.
By David Craggen for Safehaven.com
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