Trump loads another tweet into the chamber — and fires on Amazon again

A day after reports suggested Donald Trump has it in for Amazon, the U.S. president added gasoline to the fire on Thursday, tweeting that the company is dodging its tax obligations.

President incorrectly says e-commerce giant pays 'little or no taxes to state and local governments'

U.S. President Donald Trump took aim Thursday at one of his favourite targets — Amazon — by using his favourite weapon, a tweet. (SeongJoon Cho/Bloomberg)

A day after reports suggested Donald Trump has it in for Amazon, the U.S. president added gasoline to the fire on Thursday, tweeting that the company is dodging its tax obligations.

The company — or more specifically its CEO Jeff Bezos — is a frequent target of the president. Amazon founder Bezos also owns the Washington Post, one of the newspapers that has been most critical of his administration's moves.

Amazon shares dropped 4.4 per cent Wednesday after Axios reported that Trump is "obsessed" with Amazon and is seeking to find ways to "go after" the company with antitrust or competition laws.

As with many Trump claims, saying the company doesn't pay taxes despite making billions in profits is a misleading conclusion based on a shred of truth.

Amazon's annual report shows the company set aside $769 million US to pay various income taxes for fiscal 2017, but by taking advantage of a variety of tax breaks tied to executive compensation and deferring tax liabilities for as long as possible, the actual amount it paid in federal taxes is a fraction of that.

And its tax bill next year is likely to be even smaller: the company admits it expects to book a massive $789 million tax break this year as a result of the tax overhaul package Trump signed at the end of last year.

"We are subject to income taxes in the U.S. (federal and state) and numerous foreign jurisdictions," Amazon says in its annual report.

Tax issues notwithstanding, it's a fallacy to suggest the company isn't contributing to the U.S. economy — or directly to government coffers in the form of taxes.

"The red herring in this story was on state-level taxes," Toronto Region Board of Trade president Jan De Silva told CBC News in an interview." The company did indeed fight for years against collecting sales taxes on behalf of third-party resellers who use its system. 

For a time, many people selling things on Amazon would set themselves up in states with little or no state income tax, and then declare that all the income they earned in the U.S. should be taxed as though it was from there, regardless of where the buyer was from.

Some states fought against this and eventually won in court, so Amazon now collects state taxes on behalf of third-party sellers and remits them to local governments, where applicable.

"We support a federal law that would allow states to require sales tax collection by remote sellers under a nationwide system," Amazon says in its annual report. The same document notes that the company set aside $211 million to pay state taxes on its own revenues last year. But the actual final tally is likely to be much smaller than that after numerous exemptions.

Trump also says Amazon is killing small local retailers, but De Silva says retail's woes can't be blamed on one company.

"If you think about the movement into e-commerce and away from bricks and mortars, it's the fellows that own the shopping malls that are bearing the brunt of a lot of this challenge," De Silva said.

"E-commerce is helping mom-and-pop retailers get on to more platforms," she said. "It's creating jobs in logistics and warehousing. I don't think it can be stopped but I don't think he can target one company."

Indeed, local communities in Canada and the U.S. — including Toronto — are "falling over themselves," as De Silva put it, to woo Amazon to move its new headquarters to their city "because of the jobs and the economic impact" it would bring. 

"This is benefiting consumers, too," she said.

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.

While the Postal Service has lost money for more than a decade, it swung to a profit this year largely because online shopping has led to growth in its package-delivery business.

In its latest annual report, the U.S. Postal Service credits "e-commerce growth" with its package delivery service bringing in $19.5 billion in revenue last year, far more than expected.


Pete Evans

Senior Business Writer

Pete Evans is the senior business writer for Prior to coming to the CBC, his work has appeared in the Globe & Mail, the Financial Post, the Toronto Star, and Canadian Business Magazine. Twitter: @p_evans Email:


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