Amazon is paying U.S. taxes this year. But not in the way you might think

Amazon has been criticized for years over not paying U.S. taxes, despite generating billions of dollars in revenue and helping to make founder and CEO Jeff Bezos one of the richest people in the world. But, in a surprising twist, Amazon touted a U.S. tax bill on Monday. That's great, but only if you don't look too closely at the details.

In a recent blog post, Amazon noted that it had a $1 billion U.S. tax bill for 2019. Announcing the tax bill was a bit odd but telling: Amazon is trying to show that it does, in fact, pay U.S. taxes.

The problem, however, is that Amazon didn't exactly tell the whole story in its blog post. The company's 10-K, an annual filing each public company needs to make with the SEC, seems to show that Amazon won't actually pay $1 billion in taxes this year.

On page 64 of the Amazon 10-K, Amazon reveals what it's paid in U.S. taxes since 2017. And, indeed, the company does say that its tax bill for 2019 is $1.08 billion.

However, further inspection reveals that the tax bill is split between "current" and "deferred." Amazon's current tax bill, which it will need to pay to the U.S. government, is actually $162 million. The deferred amount, which allows corporations to delay paying certain taxes, is the remaining $914 million.

That's a decidedly different story.

In state taxes, Amazon has a $276 million liability owed to states this year. Just $8 million is deferred. Internationally, Amazon owes $1.1 billion in current taxes. And, oddly enough, it has a negative balance of $126 million in deferred taxes. 

RELATED: Take a look at some of the CEOs that were ousted from their companies in 2019:

CEOs and execs that were ousted in 2019
See Gallery
CEOs and execs that were ousted in 2019
Adam Neumann 
Oscar Munoz
United Airlines
Steve Easterbrook
Steven A. Kandarian
Art Peck
Gap Inc.
Susan Desmond-Hellmann
Bill & Melinda Gates Foundation CEO

Mark D. Okerstrom

Jerry Stritzke
Timothy Sloan
Wells Fargo and Company 
Steven Temares
Bed Bath & Beyond
Patrick Byrne
Jesse Angelo
NY Post
Kevin Plank
Under Armour
Melanie Whelan
Steph Korey
Bernardo Hees
Heinz Company
Mark Parker
Ian Cook
Colgate-Palmolive Company
Scott Key
David's Bridal
Dion Weisler 

Steve Nelson

Chris Beard
Dennis Muilenburg
David Hagan
Boingo Wireless
Kevin Tsujihara
Warner Bros. Entertainment
Larry Page
John Standley
Rite Aid
Hubert Joly
Best Buy
Devin Wenig
Kevin Burns

Indeed, those negative tax balances have proved important to Amazon in the U.S. over the years. In 2017, for instance, the company's current tax bill carried a negative balance of $137 million. Last year, it was a negative $129 million.

In other words, all those negative balances meant the company didn't need to pay a tax bill. And the deferred amounts mean Amazon won't need to worry about paying them now.

It's of course notable (and important) that Amazon is now paying federal taxes. And to be fair, Amazon pays a variety of other taxes to operate its business, including payroll taxes and customs duties. And, yes, everything Amazon does with its tax liability is legal and within the confines of the law.

But let's not go too far in celebrating Amazon's paying taxes in 2019. This is, after all, a company that generated $280.5 billion in revenue last year and posted a before-tax profit of $14 billion. 

What's current and what's not?

Read Full Story