How Amazon Paid $0 Federal Income Tax in 2018

Amazon paid $0 in federal income taxes in 2018. On top of that, the company also received a multi-million dollar tax rebate from the federal government. How does the company do it? President Trump's tax cuts, aggressive revenue reinvestment, years of R&D, and employee stock compensation all helped. Does America have a corporate income tax problem?

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 to point out that any Amazon Prime member paid more for that program's annual fee ($119) than the company paid in federal taxes. 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.

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How Amazon Paid $0 Federal Income Tax in 2018

[CNBC]

What do you think of the corporate tax rate in America? Should it be higher? Lower?

[CharlotteJacobsons]

Wow, Amazon avoiding $0 federal income tax in 2018 is a masterclass in financial strategy. Meanwhile, I'm sitting on $212k in an emergency fund, itching to dive into investments. Who knew avoiding taxes could be so inspiring? Need a headstart—any tips, folks?

[emranhossain]

Lobbying is called bribes in third world countries. Its just a fancy name here.

[dosmastrify]

But the IRS comes after me for an extra hundred bucks I can't prove I paid for a school textbook.

[jonasfelisilda]

Lex luthor is so evil even joker pay his taxes.

[hydrohasspoken]

I did not bribe my teacher. I lobbyed him.

[cindyli]

$ $$$ A trillion dollar company pay $0 in tax no wonder America is broke. I used to have a small business and paid over $30, 000 in tax per year. Not fair at all.

[Drcrazy]

They "invest" in politicians. That's the short answer.

[hermanramos]

We read news in the media that doom and gloom is coming and we just accept it, doom and gloom doesn’t always have to be coming, I’ve read numerous success stories of people that are pulling off tremendous gains of up to $250K within weeks in this crazy market and I just want to learn how to achieve such figures.

[jeffthompson]

Its a scam for the poor. A blessing for the rich.

[ayedawg]

Poor people : That’s not fair
*Gets rich*
ex poor person : it’s fine

[SnehPatel]

Yet small business (the back bone of the economy according to politicians) can't use 90% of those breaks and credits that multi-billion dollar multi-national companies take advantage of

[aidenw]

Worker: Flipping Burgers for minimum wage
*Government* : You need to pay taxes
Amazon: Makes 232.9 billion in revenue.
*Government* : *Your good no need to pay anything*

[jp]

Her: so how much do you make?

Me: let's just say I pay more taxes than a large company like Amazon

Edit: wow I didn't expect there to be so many uptight people who can't take a joke. Murphy's law: the best way to get the right answer is by saying the wrong thing and someone will eventually correct you

[nathanielsingleton]

Welcome to the United States of corporations.

[Gabriel.]

When Amazon pays their employees with stock all their doing is shifting the tax burden to the employees.

[napoleon]

Amazon: Pays no taxes
Me: I pay taxes on my every single Amazon purchase.

[djrednitro]

They lowered corporate tax from 35% to 21% and increased federal employees tax, now families make less due to federal tax increases and corporate make more due to corporate tax decrease.

[NYCGemini]

I made 70, 000 last year and paid over 9k in federal taxes not even including state taxes and social security but they can make billions and pay no taxes?

[coolbeans]

i've started studying nursing this year and i've spoken to a bunch of nurses, with all kinds of qualifications, about the type of salary they get and if it feels fair compared to the gruelling and emotionally straining hours they work. They all said that the tax cuts are just brutal, and you're barely left with nothing after paying insurance and other living costs, but they are passionate about their job and that's just how nursing is - long hours, emotional stress and little pay. I feel so angry that these hardworking front-line workers can't feel like they're allowed to complain about tax because it would make them look less passionate and dedicated, while billion dollar corporations can just casually not pay tax