The real problem is not this. It is the fact that Amazon can pay almost zero taxes on its online business, while a normal bookstore has to pay taxes like everyone else. That's unfair competition.
Is this still the case? I thought Amazon started collecting (and paying) sales tax years ago. It was a big deal at the time. Are you referring to something else?
Probably referring to amazon's large expenditure for which they use to offset their taxes - but these are legitimate expenditures (such as operating costs of a fleet of airplanes, warehouses, other expenses that could be considered as growth expenses).
No, the common criticism of Amazon (and companies like it) is that they cut deals with governments and/or use sneaky international accounting tricks (such as the famous "double Irish Dutch sandwich") to pay very low rates of tax relative to their profit (not revenue).
For example, Amazon UK paid zero Corporation Tax in the UK in 2023[0] despite recording £222m in profit. Meanwhile, a smaller UK bookstore has to pay 25% CT on its profits - and it can't afford the army of lawyers and accountants it would take to avoid this. And since Amazon is paying less tax, it can sell its books more cheaply, undercutting the smaller competitors.
Some might call this unfair. And I'm inclined to agree.
But to be honest, I still buy books off Amazon even though it makes me feel slightly icky. What's a boy to do?
>No, the common criticism of Amazon (and companies like it) is that they cut deals with governments and/or use sneaky international accounting tricks (such as the famous "double Irish Dutch sandwich") to pay very low rates of tax relative to their profit (not revenue).
>For example, Amazon UK paid zero Corporation Tax in the UK in 2023[0] despite recording £222m in profit.
But if you read the article you linked, you'd see it's a pretty straightforward investment deduction, rather than some dastardly tax evasion scheme? Amazon might be still doing the "double Irish Dutch sandwich" or whatever, but the article makes it clear that most of it is coming from investment tax credits.
>Amazon’s main UK division has paid no corporation tax for the second year in a row after benefiting from tax credits on a chunk of its £1.6bn of investment in infrastructure, including robotic equipment at its warehouses.
>The government’s “super-deduction” scheme for businesses that invest in infrastructure was introduced by Rishi Sunak when he was chancellor. It allowed companies to offset 130% of investment spending on plant and machinery against profits for two years from April 2021. Amazon booked a credit of £1.13m in 2021 under the scheme.
What taxes are meant here? This is always the weird part. I understand circumventing various location specific taxes or getting special deals. But taxes are paid on profit. And just as any company if there is no profits there is no tax.
And independent bookstore could use the profit they make to say remodel their store. And inside certain rules that would be legitimate expense. And they would not pay tax on it.
From what I hear, Amazon was losing money for many years, and they got to use tax laws to offset those previous losses. And that was quite a few years ago, and they have been paying a decent amount of taxes for a while. Of course, they can utilize all sorts of credits as allowed by the law.
If you have a problem with the law, call your senator, instead of ranting on a forum.
(I have nothing to do with Amazon other than being a shopper there and own some stocks via VOO.)
it's not that they were "losing" money, they just funneled all of their massive would-be profits into artificially making prices as low as possible so as to destroy competition and retail
