FactSentinel

The claim that Amazon pays no federal income taxes is an oversimplification that misrepresents the company's tax history. While Amazon did legally pay zero federal income tax in certain years (notably 2017 and 2018), the company has paid substantial federal income taxes in other years. For example, Amazon paid $1.8 billion in federal income taxes in 2021 and $2.9 billion in 2022. The blanket statement that Amazon pays "no" federal income taxes ignores these significant tax payments and presents an incomplete picture of the company's tax obligations.

The confusion stems from Amazon's use of legal tax provisions available to all corporations, including carryforward losses from years when the company operated at a loss, research and development tax credits, and deductions for stock-based employee compensation. These legitimate tax strategies sometimes reduced Amazon's federal tax liability to zero in specific years, but this does not mean the company never pays federal income taxes. Additionally, Amazon pays other substantial taxes including state, local, and international income taxes, as well as payroll taxes and customs duties.

The broader misconception is conflating "pays no taxes in certain years" with "never pays taxes." Corporate tax liability varies year to year based on profitability, investments, and applicable deductions. While debates about corporate tax policy and whether current laws are adequate remain valid, the categorical claim that Amazon pays no federal income taxes is factually inaccurate.