Amazon deployed a lobbyist to push to lower its tax bill even as the company and founder Jeff Bezos publicly supported President Joe Biden’s corporate tax increase proposal, Politico reports.
Bezos announced earlier this year that the company would support “a rise in the corporate tax rate” to pay for Biden’s infrastructure proposal even as business groups like the Chamber of Commerce opposed the increases.
“We support the Biden Administration’s focus on making bold investments in American infrastructure,” Bezos said in a statement in April. “We recognize this investment will require concessions from all sides — both on the specifics of what’s included as well as how it gets paid for (we’re supportive of a rise in the corporate tax rate).”
The statement came after Biden called out Amazon on the campaign trail, calling for the company to “start paying their taxes” after numerous media reports showed that the company paid no federal income taxes for years.
Quietly lobbied for tax break:
But even as the company backed higher corporate taxes, it went to work on lobbying on a section of the tax code dealing with the research and development tax deduction.
The company hired a former Obama aide to lobby Congress and the R&D Coalition, a group of companies including Amazon, Intel, and others, hired a former aide to Sen. Mitch McConnell.
The R&D deduction is intended to give tax breaks to companies that spend money on research. It’s unclear how much the tax credit has saved Amazon but the company said in a Securities and Exchange Commission filing this year that the tax credits that helped cut its tax bill “were primarily related to the U.S. federal research and development credit.”
How much of a tax break?:
It’s difficult to tell how much money the tax break saved Amazon but Matthew Gardner of the Institute on Taxation and Economic Policy estimated that it’s “very likely they’re getting hundreds of millions of dollars a year in R&D tax credits.”
Though the tax credit has bipartisan support, the deduction could become less valuable next year without Congressional action. The 2017 Republican tax law would prevent companies from immediately deducting the full amount for R&D expenses starting next year, requiring them to break up the deduction over five years.
The Biden administration has not made its position on the issue clear but Treasury Secretary Janet Yellen told Congress last month that “promoting innovation is a critical priority for President Biden” and that “continuing to allow firms to expense R&D rather than shifting to amortizing could be one very effective way to bring that about.”
