December 27th, 2021

How Bezos’s Amazon Legally Pays $0.00 in Taxes

The CEO Jeff Bezos is on the World’s Riches People’s List and is also one of the most notorious tax avoiders in American history. 
2018 – Amazon more than doubled its profit,
2017: $5.6 Billion
2018: $11.16 Billion 

More importantly, Amazon got to pay $0 in taxes by using tax deduction, like you or I would; obviously much more lucrative deductions or decisions. 

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Here’s how Amazon did it in 2018:

Research and Development Tax Credit:
7% of what Amazon spent on wages and supplies for it R&D department, they get to claim as a deduction (thank you America for encouraging innovation). In 2018 Amazon saved more than $1.4 billion due to the tax credit.

2017: President Trump did his revision to the US tax code, specifically “Depreciation” that allow US companies to skip the decade long amortized process entirely to reap the benefits immediately, or from the very start i.e. Amazon builds a new data center it gets to claim the full tax deduction now instead of spreading it out over 30 to 40 years (tax code is to last at least until 2022).

Look at the impact (Amazon’s deprecation) increased by 40% (not sure how much the tax revision affected the numbers):
2017: $8.8 Billion
2018: $12.1 Billion
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Stock-Based Compensation:
Senior employees are paid in stock (options) rather than just cash.  So Amazon gets to deduct the value of the money it gave.  However in Amazon’s case, it didn’t buy the shares off the market and give to the employees, it just creates them, in the same way that the FED can print new money.  The Amazon stock holders actually are who pay for it, because their shares are worth less because Amazon is constantly creating more to pay its employees; strategy works as long as the stock price keeps going up, as it did.  This strategy not only made Amazon’s wages virtually free to the company, but also created a huge tax deduction.
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In 2018: Amazon saved $1 Billion by paying its employees in shares it created for FREE

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Sincere Headway Inc.