Amazon puts the smile in federal income taxes — by not paying any
|| Seattle Times
“”Last week I suggested that Amazon isn’t so much a Seattle company as “sovereign, borderless nation-state.” It turns out I left a key descriptor out of that phrase.
That would be “taxless.”
The nation’s third-largest company booked record profits last year. But paid nothing in U.S. federal taxes.
“Zero, as in not a cent,” says Matthew Gardner, of the Institute on Taxation and Economic Policy, a D.C.-based think tank.
Amazon did pay taxes to state and foreign governments (more on that in a minute). But the financial statements mean that one of the most powerful corporate entities in the world paid fewer dollars to the upkeep of the national government than tens of millions of individuals — such as, say, your average lowly newspaper columnist.
That’s right – I’m paying more to the U.S. government for 2018 than Amazon (I’m talking about the corporate entity, not its mass of employees). So, probably, are you.
Gardner says the internet giant was able to zero out its bill — actually go below zero, as it qualified for a rebate of $129 million — in large part due to Congress and President Donald Trump’s year-old tax-cut law.
“That law didn’t reform much of anything; it was simply to slash taxes,” Gardner said. “So it isn’t surprising this is happening. Cutting corporate taxes was the whole point.”
All the way to nothing?
The company also got a series of tax credits (for equipment purchases, for example) and booked allowable business deductions (the largest of which was writing off stock options).
Businesses often pay little or no tax when they make low profits. But Amazon’s total U.S.-booked profit for 2018 nearly doubled to more than $11 billion.
Gardner isn’t saying Amazon did anything wrong, and of course its hundreds of thousands of employees pay income taxes. But last year total corporate taxes paid to the U.S. government plummeted 31 percent, a drop described by a debt watchdog group as “unprecedented during a time of economic growth.”
The freight paid by U.S. businesses is already down another 18 percent in the first quarter of the 2019 year (the fiscal year for the government started last October). It’s part of the reason why the federal deficit soared 42 percent in that same quarter, despite a booming economy and no major war straining the budget.
The latest head-shaking factoid about our red ink is that the federal government next year will spend more on interest on the debt than it will on children. As one critic put it: more on the past than on the future.
Amazon’s financial statements also show it’s only the U.S. that’s letting the company contribute nothing of late.
Netflix paid NOTHING in federal or state taxes in 2018 despite posting record profits of $845million – and even got a $22million rebate
|| DailyMail UK
“Netflix didn’t pay a cent in state or federal income taxes last year, despite posting its largest-ever U.S. profit in 2018 of $845million, according to a new report.
In addition, the streaming giant reported a $22 million federal tax rebate, according to the Institute on Taxation and Economic Policy (ITEP).
Senior fellow at ITEP Matthew Gardner said corporations like Netflix, which has its headquarters in Los Gatos, California, are still ‘exploiting loopholes’ and called the figures ‘troubling’.
Netflix says they paid $131 million in taxes in 2018 and this is declared in financial documents. But Gardner says this figure relates to taxes paid abroad, according to a separate part of their statements.
Gardner added: ‘Fortunately, however, there is another, more complete geographic disclosure of income tax payments.
‘The notes to the financial statements have a detailed section on income taxes. And what this tells us is that all of the income taxes Netflix paid in 2018 were foreign taxes. Zero federal income taxes, zero state income taxes in the US.’
Gardner said the public is now ‘getting its first hard look at how corporate tax law changes under the Tax Cuts and Jobs Act affected the tax-paying habits of corporations’.
He said: ‘With a record number of subscribers, the company’s profit last year equaled its haul in the previous four years put together. When hugely profitable corporations avoid tax, that means smaller businesses and working families must make up the difference.’
….read more at: Daily Mail UK