Amazon loses $31B after Trump targets them on Twitter over tax practices

Share

President Donald Trump renewed his long-running assault on Amazon.com Inc. with an early morning tweet Thursday. He could also step up his support for allowing states to collect sales tax on third-party purchases from Amazon, or seek to have the Postal Service charge more to deliver packages.

It's also true that Amazon, as well as other online retailers, may not pay taxes in some areas, but that's because the laws there haven't kept pace with technology, according to the Institute on Taxation and Economic Policy.

The changes occurred last Friday, a week before President Trump sent the company's shares to red territory by attacking it on Twitter.

According to the Axios story, Trump doesn't believe Amazon pays its fair share of sales tax.

"A lot of people have made this, with respect to Amazon, about personalities and the CEO at Amazon - we're talking about Jeff Bezos here", he said on Thursday on the Fox News channel.

A Supreme Court ruling favouring South Dakota could funnel up to $13 billion (£9.3 billion) annually of new tax revenues into the coffers of affected USA states, according to a 2017 federal government report.

Trump has criticized the big e-commerce company over taxes and jobs in the past, without offering evidence.

Stifel analyst Scott Devitt said the e-retailer collects sales taxes in the 45 states that have state sales taxes and the District of Columbia.

Brick-and-mortar stores have closed by the hundreds, as retail chains struggle to compete with the convenience of online shopping, a transformation led and dominated by Amazon. Separate figures in the report show it was expecting to pay $100 million to $200 million in taxes at the US state level in 2017.

Devs Working On iOS 11.3 Jailbreak, But We May Have To Wait
But the service is now only available in beta, and user who want it will have to install that version of the software . If it's not entirely obvious, iOS 11 .3 is the most significant of the bunch, containing the most features.

"Amazon for many years reinvested all its profits into expansion, with the result that it paid little or no taxes because taxes are calculated based on profits", said Joseph Bishop-Henchman, executive vice president of the Tax Foundation.

Trump's attacks on Amazon reflect a broader debate about its effect on the U.S. economy.

In July previous year, Donald Trump tweeted that many articles about him in the Post were "fake news" and in another tweet he asked if the Washington Post was being used as a "lobbyist weapon" against Congress. The Post Office lost $2.7 billion a year ago, but "Shipping and packages were a rare bright spot for USPS in 2017, one of two sub-categories of mail for which revenue increased, rather than declined", according to Quartz. Of course, Amazon might not even need the Post Office when its fleet of drones takes flight. That said, the Post Office does cut deals with Amazon (and other large clients), and maybe it could cut a better deal and charge Amazon more.

In his tweet, Trump also took aim at the company's use of the postal service is "causing tremendous loss", but that too is misleading.

In a 2017 statement, Amazon said that its partnership with the Postal Service was "reviewed annually by the Postal Regulatory Commission", which found its contracts to be profitable.

In the October-December 2017 quarter, the service handled 7% more packages than in the same period a year before, while mail declined about 5%.

"If I become president, oh do they have problems", Trump said at a campaign stop in 2016.

In another financial report a year ago, USPS said growth in its package business was "a result of our successful efforts to compete in the ground shipping services and "last mile" e-commerce fulfillment markets, including Sunday delivery".

Share