Amazon paid aught dollars in federal assets tax in 2017.
Amid civic debates about assets asperity and tax cuts for the ultra-rich, one talking point is frequently accent in online memes and by political abstracts such as Bernie Sanders is that online bartering behemothic Amazon.com, admitting demography in $5.6 billion in accumulation in 2017, paid no federal accumulated assets taxes for that year:
(With account to the affirmation about Amazon advisers on welfare, see our actuality ysis on that affair here.)
In commendations to U.S. federal assets taxes, the affirmation that Amazon paid none in 2017 is about absolutely factual. While Amazon’s tax filings are not public, their SEC filing for the year 2017 illustrates that the aggregation acclimated the tax cipher expertly (and legally) to their advantage, so able-bodied that the aggregation advancing a $137 actor tax acquittance from the federal government (numbers are in millions of dollars):
Amazon did pay taxes to alone U.S. states ($211 million) and to all-embracing jurisdictions ($724 million), but their federal assets tax accountability was (less than) zero. The filings announce that two factors provided the bobcat allotment of Amazon’s bargain federal tax liability: $220 actor account of tax credits, and $917 actor in tax-deductible controlling pay acquired from the auction of stocks:
The third abrogating account in the SEC filing, $789 actor in bargain tax accountability as a aftereffect of the 2017 Tax Act, will be activated to approaching tax years, according to a address from the Institute on Taxation and Bread-and-er Policy.
SEC filings do not crave a aggregation to account the specific credits they utilize, but there are several avenues Amazon would acceptable accept pursued. Annette Nellen, a assistant and administrator of the Master of Science in Taxation affairs at San Jose University, said that Amazon’s write-offs acceptable accommodate credits for ysis and development, calm production, and accessories depreciation. And according to a address from the Bread-and-er Policy Institute, Amazon receives countless tax incentives from accompaniment and bounded governments as well:
The amplification of Amazon’s concrete administration arrangement has coincided with a cardinal business plan of negotiating millions in tax abatements, credits, exemptions, and basement abetment from accompaniment and bounded governments in the name of bounded bread-and-er development. By the end of 2016, Amazon had acceptable accustomed over $1 billion in accompaniment and bounded subsidies for its facilities, which would accommodate not alone accomplishment centers but “sortation” centers that alone array packages, commitment centers, and added facilities.
Publicly-traded corporations can account the b options they admission to advisers as a business bulk in their accounting, and if an option-receiving agent makes over $1 actor a year in salary, the profits from the auction of those stocks can be again counted as a federal assets tax answer for the association (primarily due to a Clinton-era accommodation over how to cap controlling pay). B options acquiesce an agent to acquirement b in their employer’s aggregation at a set price, behindhand of its accepted bazaar value:
Options accord admiral and investors the appropriate to buy shares of a aggregation at a after date and at specific prices. For example, if a arch controlling joins a media aggregation back its b is trading at $55 a share, but years later, the allotment bulk has skyrocketed to $100, that arch controlling can still buy the shares at $55, pocketing the massive difference.
In the cases of their accomplished paid employees, Amazon and added companies are able to abstract the “massive difference” advisers accomplish back they advertise that b at a profit. According to the Center for Tax Justice, “because companies about low-ball the estimated values, they usually end up with abundant bigger tax write-offs than the amounts they abstract as a ‘cost’ in accretion the profits they address to shareholders.” The $917 actor in stock-based advantage listed in Amazon’s SEC filing acceptable stems from their top employees’ cashing in on their b options for a ample profit.
While it is absurd to apperceive the exact bulk of money Amazon did or did not pay to the federal government in 2017, their own accounting suggests that they accepted their federal accumulated assets tax accountability to be abrogating that year.
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Published:26 September 2018
U.S. Securities and Exchange Commission. “Amazon.com Inc. Form 10-K” 2 February 2018.
Gardner, Mathew. “Amazon Inc. Paid Aught in Federal Taxes in 2017, Gets $789 Actor Windfall from New Tax Law.” Institute on Taxation and Bread-and-er Policy. 13 February 2018.
Tobias, Manuela. “Bernie Sanders Says Amazon Paid No Federal Assets Tax in 2017. He’s Right.” Politifact. 3 May 2018.
Jones, Janell and Ben Zipperer. “Unfulfilled Promises.” Bread-and-er Policy Institute. 1 February 2018.
Gunjan, Banerji. “Potential Loser in Tax Overhaul: Controlling B Options.” The Wall Street Journal. 19 December 2017.
Citizens for Tax Justice. “Fortune 500 Corporations Acclimated B Option Loophole to Avoid $64.6 Billion in Taxes Over the Past Five Years.” 9 June 2016.
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