Amazon Reaps Record $669M in Tax Breaks

Amazon has enjoyed record-breaking largesse from state and local governments this year, securing more than $650 million in tax breaks as it builds out its distribution networks around the United States.

The watchdog group Good Jobs First reported that Amazon has so far received $669 million in state and local tax abatements, rebates, and workforce development funds in 2021, with all but $21 million of the money going toward expanding its one-day or same-day delivery networks.

It is the most in tax incentives that Amazon has won in any single calendar year to expand distribution since Good Jobs First started collecting the data in 2000.

“The payouts came despite an uncertain economy and complaints about Amazon’s working conditions, including modest pay, strict monitoring, and high injury rates,” Engadget said.

According to CBS News, the retail giant “has been expanding its footprint at a breakneck pace since last summer, when coronavirus-related disruptions boosted its coffers while straining its already considerable delivery network.” So far this year, it has opened 250 new warehouses.

Two distribution centers in the Chicago suburbs were the main beneficiaries of the 2021 subsidies, receiving $400 million, while a warehouse outside of Rochester, N.Y., accounted for another $170 million.

Good Jobs First said its estimate was likely conservative because some deals are not fully disclosed.

Amazon, which received a $750 million incentive package in 2019 to build a “second headquarters” in Northern Virginia, has cited job creation and investment in justifying the tax breaks.

“These incentives are typically available to any firm that meets the criteria and companies do not receive a penny until after they have created jobs and made capital investments,” the company told the Financial Times. “In 2020 alone, Amazon invested $150 billion in the U.S., opened more than 100 sites, and created more than 400,000 jobs across more than 40 states.”

But Engadget said “the question is whether or not Amazon should be accepting tax incentives in the first place. The company made more profit in the first year of the pandemic than it did in the previous three years, raking in $26.9 billion.”