Amazon Paid No Taxes on $5.6 Billion Profit, Seeks Taxpayer Subsidy For New Headquarters

Cities offer billions in incentives to woo Amazon.

November 8, 2018 - Los Angeles, CA – Major U.S. cities are offering billions in incentives and tax breaks to woo Amazon's new headquarters (HQ2) to their city. A decision may be in the next few days.

Amazon is one of the largest and most successful corporations in the world, yet paid no federal taxes on $5.6 billion in profits in 2017.

Why are struggling taxpayers being tapped to subsidize its second headquarters and possibly a third? New Jersey, for example, is offering $7 billion in tax breaks if Amazon builds its new campus somewhere around Newark. Chicago offered $2 billion in tax breaks. Those aren't the only tax deals benefitting Amazon who got another $147 million in tax breaks for building data centers around the country.

Amazon claims "We expect to invest over $5 billion in construction and grow this second headquarters to include as many as 50,000 high-paying jobs." Factually, the incentives aren't creating new jobs, the positions will be staffed regardless of the location, and the assets still belong to Amazon. Additionally, Amazon gained enormous amounts of raw publicity to expand its market power and sideline its competition from the endless media coverage.

Robert B. Engel of the nonprofit Free & Fair Markets Initiative states “They’ve duped more than the bidders. They’ve duped all of us."

Amazon is no stranger to ethics and business practice criticism. Amazon is under fire for disproportionately low wages, copyright piracy, trademark infringement and counterfeit product sales, data leaks, fake product reviews, employee bribes and fraudulent sales schemes and scams. A trade group has recommended Amazon be added the U.S. Govt. Notorious Markets List. Hardly a first choice for taxpayer support.

Amazon's federal tax loophole is largely attributable to “excess stock-based compensation deductions” and the effect of the 2017 Tax Act, according to Amazon's U.S. Securities and Exchange Commission filing earlier this month says Fox News. In other words, Amazon was able to leverage the tax credits and breaks to zero out taxes it owed this year, according to the Institute on Taxation and Economy Policy (ITEP), a non-partisan think tank.

The terms; bait and switch, scam, blackmail and something for nothing are bubbling up after Amazon announced Monday it would split its headquarters between two locations rather than picking one city.