The rare disclosure of tax data comes as the company fights back against a Seattle City Council proposal that would tax big companies based on their number of employees.
Amazon paid about $250 million in state and local taxes in Washington for 2017, according to a person at the company familiar with the data, a disclosure that comes as the retailer fights back against a Seattle City Council proposal that would tax big companies based on their number of employees.
Amazon last week raised the prospect that it would halt its expansion in the city if the tax went through, announcing a halt to planning of a new 17-story tower, and suggesting it might sublease a massive skyscraper now under construction that it had committed to occupy.
The person familiar with the data said the sum includes payments to state, county and city entities. It does include sales taxes paid on the company’s own acquisition of equipment and supplies, but not customer purchases of Amazon-sold goods.
A breakdown of individual taxes included in the $250 million total, and how it was divided among government entities, could not immediately be determined.
An Amazon spokesman declined to comment on the tax data.
It is unclear how the figure compares with the tax bills of other large companies. Government agencies treat individual taxpayer information confidentially. Spokespeople for the state department of revenue and Seattle finance department declined to comment on Wednesday.
Companies, for their part, rarely disclose specifics unless compelled by regulators. Disclosures by Boeing related to its record-breaking 2013 tax break from the state of Washington show that, absent the subsidy, the plane maker would have been charged about $252 million in B&O (business and occupation) taxes in 2016.
Washington, which has no personal or corporate income tax, primarily funds programs through a sales tax tacked on to the cost of goods and services. For big companies, though, the B&O tax —levied on gross-receipts of goods sold in the state or attributed to activity there — is often the largest component of their direct payments to state coffers.
Seattle’s proposed head tax, aimed at raising about $75 million to fund homelessness services and affordable housing, would charge large companies about $500 per employee in the city, per year. Five of the nine city council members have indicated they support the tax, though it’s unclear whether Mayor Jenny Durkan would approve or veto the bill.
Amazon raised its voice in opposition to the levy last week, the company’s biggest show of force in Seattle politics. Outside observers pegged the move to Amazon executives’ objection to the political climate that brought the tax, and a longtime obsession with controlling costs — and, especially, minimizing taxes.
Dozens of other businesses have also come forward to oppose the move.
“I would say that things like the head tax in Seattle I think are super dangerous for cities to implement,” Andy Jassy, chief executive of the company’s Amazon Web Services unit, said Wednesday on CNBC. “What company is going to want to start — or move to or grow in — a city that penalizes them for hiring full-time employees?”
The tax has ignited fierce debate about the efficacy of the city’s response to the homelessness crisis to date, and what role companies like Amazon should play in footing the bill for that response.
Under the head tax, Amazon would likely be charged more than $20 million a year, based on the company’s more than 45,000 employees in the city. In 2021, the levy would convert to a 0.7 percent payroll tax, which would likely increase the cost to the company. Based on salary data posted to job reviews site Glassdoor that show average Amazon wages in Seattle totaling about $110,000, if Amazon held to its prior expansion plans that gave it room for 55,000 employees, the company’s tax bill could grow to $43 million. That total would rise if stock-based compensation was also taxed.
The disclosure of Amazon’s state-level tax payment adds some context to the company’s existing local tax burden, very little of which is a matter of public record.
Amazon entities that own Seattle property are the largest and fifth-largest individual property tax payers in the city, according to government filings. At the regular rate applicable to the company’s home base in South Lake Union, that would yield a tax bill of roughly $27 million. The company also directly pays state and city business and occupation taxes, which tax the portion of Amazon’s sales attributable to in-state customers. Those revenue totals are unclear.
Meanwhile, Amazon has taken advantage of a state sales and use tax break aimed at high-tech firms as it built out its $4 billion corporate campus. The company deferred a cumulative $54 million in taxes under the program.
Amazon’s securities filings show the company paid $957 million in cash in taxes in 2017 to governments worldwide, after accounting for tax refunds.
A separate figure in Amazon’s filings — the company’s estimate of its income tax liability for 2017 — shows that nationwide, its state income tax bill was $211 million. On U.S. federal income taxes, Amazon recorded a $137 million refund.
Taxes like Washington’s B&O are gross receipts taxes, and can be excluded from income tax tallies.
Information in this article, originally published May 9, 2018, was corrected on May 10, 2018. A previous version incorrectly said the $250 million excluded sales tax on purchases made by Amazon. The earlier version also gave an incorrect figure for Amazon’s savings under a sales-tax deferral program. The company deferred a cumulative $54 million, not $165 million.