This image was removed due to legal reasons. Amazon, one of the most valuable and profitable companies on Earth, will pay $0 in federal corporate income taxes this year, according to a report from the Institute on Taxation and Economic Policy . Advertisement The company nearly doubled its profits last year to $11.2 billion, up from $5.6 billion in 2017. It didn’t pay any federal income taxes on its 2017 income either. In its filings, Amazon reported a federal tax rebate of $129 million, making its tax rate an astonishing -1 percent. How is this possible? According to the ITEP, t he tax filing indicates that much of Amazon’s windfall is thanks to tax credits and tax breaks on executive stock options. Some of it is also the result of the Trump tax cuts, which gave corporations even more leeway to avoid taxes. Things were slightly less absurd under Barack Obama—between 2011 and 2016, Amazon paid 11.4 percent of its federal income in taxes. This isn’t the first time Amazon’s tax avoidance has been in the news. Last year, the company successfully lobbied Seattle Mayor Jenny Durkan to repeal a new tax that would have helped the city’s homeless community, a move so heartless it strains the imagination. On Thursday , Amazon announced it would not go ahead with plans to build a new headquarter’s in New York’s Long Island City. The decision came about due to pushback from local activists and politicians. Perhaps if enough people organize effectively, we could convince Amazon to actually pay it s goddamn taxes. Or better yet, nationalize the company.<doc-sep>Amazon, which doubled its profits and made more than $11 billion in 2018, won't pay any federal income taxes for the second year in a row, the Institute on Taxation and Economic Policy reported on Wednesday. The company will not be required to pay the standard 21 percent income tax rate on its 2018 profits, and is claiming a tax rebate of $129 million, which ITEP describes as a "a tax rate of negative 1 percent." Amazon drew ire in 2018 for not paying federal taxes on its $5.6 billion in profits the year before, which was made possible due to tax credits and stock-based compensation, reports Politifact. Last year was the first time Amazon paid no federal income tax whatsoever. From 2011 to 2016, Amazon payed federal income tax at a rate of 11.4 percent — less than half of the national rate of 35 percent. Due to President Trump's corporate-friendly tax cuts, Amazon will pay any deferred or postponed taxes at the lowered rate of 21 percent rather than the previous rate of 35 percent, per Politifact. Based out of Washington state, which has no income tax, Amazon has also been free from state filings on income.<doc-sep>While some people have received some surprise tax bills when filing their returns, corporations continue to avoid paying tax — thanks to a cocktail of tax credits, loopholes, and exemptions. According to a report from the Institute on Taxation and Economic Policy (ITEP), Amazon (AMZN) will pay nothing in federal income taxes for the second year in a row. Thanks to the new Tax Cuts and Jobs Act (TCJA), Amazon’s federal tax responsibility is 21% (down from 35% in previous years). But with the help of tax breaks, according to corporate filings, Amazon won’t be paying a dime to Uncle Sam despite posting more than $11.2 billion in profits in 2018. How is that possible? “It’s hard to know exactly what they’re doing,” said Steve Wamhoff, ITEP’s Director of Federal Tax Policy. “In their public documents they don’t lay out their tax strategy. So it’s unclear exactly which breaks [the company is taking advantage of]. They vaguely say tax credits. One could think of many different ways a corporation could do this, like the depreciation breaks which were expanded under TCJA.” Jeff Bezos, founder and chief executive officer of Amazon.com Inc., listens during a discussion at the Air Force Association's Air, Space and Cyber Conference in National Harbor, Maryland, U.S., on Wednesday, Sept. 19, 2018. (Photo: Andrew Harrer/Bloomberg via Getty Images) ‘It’s hard to tell’ Though Amazon might have taken advantage of new breaks and loopholes available under TCJA, this isn’t the first year that Amazon has avoided paying federal tax. The company reported $5.6 billion in U.S. profits in 2017 and paid $0 last year as well. "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," an Amazon spokesperson said in a statement. According to Wamhoff, the company’s apparently nonexistent tax bill highlights that there have always been issues with corporate tax liability. “The thing we would need to know is would they have had positive corporate income tax liability were it not for TCJA?” Wamhoff asked. “Maybe. It’s hard to tell.” (Source: Institute on Taxation and Economic Policy analysis of SEC filings) Revelations about Amazon’s tax liability come despite President Trump’s very public criticisms of Amazon and Bezos for not paying enough tax. The president had promised his new tax law would end special interest breaks and close loopholes, but it’s clear that isn’t the case, says Wamhoff. Story continues “This is another situation where the rhetoric from President Trump is completely divorced from what he does and what his policies do,” explained Wamhoff. “The part about cutting corporate tax rate was true. And they eliminated some corporate tax rates but not all.” He added: “The corporate tax revenue was a big loser. We aren’t going to see corporations suddenly paying more. We see that in the case of Amazon.” Declining tax revenue has only widened deficits, as national debt has ballooned up and over $22 trillion. Amazon briefly touched $1 trillion in market cap on September 4, 2018. (Chart: Yahoo Finance) Amazon not alone TCJA had been criticized in large part due to the benefits it provided the wealthiest Americans and big corporations. Wamhoff says it’s ironic that the corporate tax rate was slashed to 21% (from its previous 35%) because the effective corporate tax rate under previous tax law was 21%, after accounting for tax breaks and loopholes. Therefore, Wamhoff says, we’ll likely see the effective tax rate fall even lower. But if anyone thinks that Amazon is alone, they would be wrong. Last week, Netflix also did not pay American federal or state income taxes according to a separate ITEP report, despite posting record profits. Netflix has disputed those findings, while ITEP claims that the $131 million paid by Netflix is taxes on foreign income. And historically Wamhoff says, this story is nothing new. Several corporations have avoided paying federal income tax throughout the years, he says. “These companies have been consistently profitable,” he explained. “And they should really be paying taxes.” Amazon makes money in a lot of ways. (Graphic: David Foster/Yahoo Finance) READ MORE: Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit.<doc-sep>Amazon will not pay any federal income taxes for the second year in a row, according to a report released Wednesday The Institute on Taxation and Economic Policy found that the online retailer, which reported $11.2 billion in profits in 2018, did not pay income tax because of unnamed “tax credits” in their disclosure. ADVERTISEMENT The company will reportedly receive a $129 million federal income tax rebate, effectively making their tax rate -1 percent. The company also reportedly paid zero federal income taxes for 2017, when it made $5.6 billion in U.S. income. A spokesperson from Amazon challenged this week's report, saying the company did in fact specify what tax credits they used and that the report made mistakes in calculating 2016 tax expenses. “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,” they said. “Corporate tax is based on profits, not revenues, and our profits remain modest given retail is a highly competitive, low-margin business and our continued heavy investment.” The Institute on Taxation and Economic Policy, a liberal think tank, says that the Trump administration's 2017 tax plan is partially responsible by failing to "broaden the tax base or close a slew of tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes on almost half of their profit." The think tank calculated, using Securities and Exchange Commission filings, that Amazon had an effective tax rate of 5.9 percent in 2015 and 10 percent in 2016. Several lawmakers, including President Trump Donald TrumpTrump lashes out after grand jury seated for New York criminal probe Schumer tees up vote on Jan. 6 commission bill Senators struggle to save Jan. 6 commission MORE and Sen. Bernie Sanders Bernie SandersSenate competitiveness bill includes B authorization for Bezos space company Sanders wants government to get 'piece' of US semiconductor companies in exchange for aid Poll: 51 percent oppose Sanders-led resolution to block weapons sales to Israel MORE (D-N.Y.) have criticized Amazon's low tax rates. "I have stated my concerns with Amazon long before the Election," the president tweeted in 2018. "Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!" "You know what Amazon paid in federal income taxes last year? Zero," Sanders tweeted last year, along with an article about Amazon CEO Jeff Bezos getting $9 billion richer in two days.<doc-sep>
Amazon is one of the world's most valuable companies, valued at nearly $800 billion, and the e-commerce giant pulled in $232.9 billion in global revenue in 2018. And yet, Amazon's federal tax bill this year: $0. For the second year in a row. In fact, Amazon is actually getting a federal tax refund of $129 million this year, due in part to a combination of tax credits and deductions. This is despite the fact that Amazon nearly doubled its taxable income in 2018 to $11.2 billion, from $5.6 billion a year earlier. In other words, Amazon is basically paying a -1 percent federal income tax rate this year after reportedly paying a federal rate of more than 11 percent between 2011 and 2016, according to The Week. Sen. Bernie Sanders, I-Vt., who has criticized Amazon in the past for not paying higher federal taxes, took to Twitter on Thursday to point out that any Amazon Prime member paid more for that program's annual fee ($119) than the company paid in federal taxes. BERNIETWEET Prime has 100 million subscribers. "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," an Amazon spokesperson said in a statement provided to CNBC Make It. Amazon reported its sizable federal refund in a recent corporate filing for the company's fourth-quarter earnings report. However, Amazon also notes in that filing that it will pay $756 million in total taxes this year, between state and international taxes. A report this week from the Institute on Taxation and Economic Policy, or ITEP, a nonpartisan and nonprofit tax policy think tank, pointed out the fact that Amazon will not pay federal taxes for the second year in a row. In fact, last year, Amazon received an even larger refund, getting $137 million from the federal government. One reason for Amazon's nonexistent federal tax bill is the Tax Cuts and Jobs Act that Congress enacted in 2017, which lowered the statutory corporate tax rate from 35 percent to 21 percent. In addition to the lower tax rates for corporations, the new tax law also "failed to ... close a slew of tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes on almost half of their profits," ITEP senior fellow Matthew Gardner wrote in a report on Wednesday.