Amazon To Pay No Federal Income Tax For 2018

According to a report from the Institute on Taxation and Economic Policy, Inc. (NASDAQ: AMZN) will pay $0 in federal income taxes for the 2018 tax year. Amazon is valued at nearly $800 billion and is considered the world’s largest online retailer.

The retail giant apparently doesn’t own any federal income tax because of unnamed “tax credits” that will give it a $129 million federal income tax rebate. The retailer reported $11.2 billion in profits in 2018. According to those numbers, Amazon has an effective tax rate of -1 percent for 2018.

The institute points to the Trump Administration’s corporation-friendly Tax Cuts and Jobs Act, passed in 2017, as the reason for Amazon’s remarkable tax results. The act permanently decreased corporate tax rates while keeping many of the deductions businesses claim to lower their rates.

This is the second year in a row that Amazon will not pay any federal income taxes. The company reportedly paid zero federal income taxes for 2017. That year, the company reported $5.6 billion in U.S. income.

Using Securities and Exchange Commission filings, the institute calculated that Amazon had an effective tax rate of 5.9 percent in 2015 and 10 percent in 2016. According to other reports, Amazon paid an 11.4 percent federal income tax rate between 2011 and 2016.

Each of those years, it appears that Amazon paid well under the current 21 percent U.S. corporate tax. A slew of tax loopholes allow profitable companies to routinely avoid paying federal and state income taxes on a considerable portion of their profit

Critics are slamming the company for taking advantage of the tax code while raking in billions of dollars. A spokesperson from Amazon countered by saying, “Amazon pays all the taxes we are required to pay in the U.S. and every country where we operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years.”

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