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Businesses Government The Almighty Buck The Courts

Amazon Wins $1.5 Billion Tax Dispute Over IRS (reuters.com) 77

Amazon.com on Thursday won a more than $1.5 billion tax dispute with the Internal Revenue Service over transactions involving a Luxembourg unit more than a decade ago. From a report: Judge Albert Lauber of the U.S. Tax Court rejected a variety of IRS arguments, and found that on several occasions the agency abused its discretion, or acted arbitrarily or capriciously. Amazon's ultimate tax liability from the decision was not immediately clear. The world's largest online retailer has said the case involved transactions in 2005 and 2006, and could boost its federal tax bill by $1.5 billion plus interest. It also said a loss could add "significant" tax liabilities in later years. Amazon made just $2.37 billion of profit in 2016, four times what it made in the four prior years combined, on revenue of $136 billion.
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Amazon Wins $1.5 Billion Tax Dispute Over IRS

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  • by Anonymous Coward

    "US Loses $1.5 Billion Tax Dispute With Amazon"

    Transfer pricing should be illegal.

  • Good! (Score:2, Funny)

    by Anonymous Coward

    Large corporations shouldn't have to pay taxes at all, given the many benefits to society they provide. I think once a business reaches a certain size, it should become exempt from income tax. That will give small business owners the incentive to grow and create more high paying jobs.

    China's economy is expanding so fast, we've got to do something to keep them from taking over. Eliminating income taxes for large corporations could be just what we need to keep the Chinese menace in check.

    • by Anonymous Coward

      Are you fscking serious? Large corporations don't pay enough tax. The effective tax rate of most of our large US companies are no more than 10%.

      Lower taxes do not create jobs. Lower taxes on the rich and lower taxes on the corporations just allow them to keep getting richer. Nothing else changes.

      • by wizkid ( 13692 )

        Yes, corporations should pay higher taxes. But, if you force them to pay higher taxes, they'll move, and take the jobs/money with them. So they should pay higher taxes, but if we charge higher taxes, were screwed anyway.

        • by gtall ( 79522 )

          Yes, but moving out of the U.S. means no recourse to the U.S. legal system except as a foreign entity. And Amazon will lose their low transportation costs if their "fulfillment centers" are not in the U.S.

          • And Amazon will lose their low transportation costs if their "fulfillment centers" are not in the U.S.

            You seem to be under the delusion that American tax law makes sense. It does not. Taxes are not based on where activities occur, but where the company is incorporated. So if an American company makes a laptop in China, and sells it in France, the profit on that transaction is taxable in America. This gives companies a huge incentive to either incorporate overseas, or to keep their capital outside of America (the profit isn't taxable until it is repatriated). No other country has such stupid job-killing

        • But, if you force them to pay higher taxes, they'll move, and take the jobs/money with them.

          Exactly how is Amazon going to move outside the US? Their business model is dependent on being able to deliver stuff quickly which means they aren't going anywhere and are going to be subject to US taxes whether they like it or not.

          So they should pay higher taxes, but if we charge higher taxes, were screwed anyway.

          They don't need to pay higher taxes, they just need to be prohibited from weaseling out of paying taxes they rightfully should have to pay. And no, just because they found some clever loophole doesn't make it ok.

          • by lgw ( 121541 )

            These aren't taxes on activities that happened in America. If they decided to incorporate in e.g. the Caymans, they'd still owe US tax on US activities, just like today, but they wouldn't owe US tax on stuff made, shipped, and consumed in Europe, like they do today.

            It's the tax system that's fucked up here.

        • Yes, corporations should pay higher taxes.

          No they shouldn't. Corporate taxes are regressive. The cost of the taxes are passed on to the customers (as higher prices), the employees (as lower wages), or the shareholders (as lower dividends or share prices). The first is equivalent to a sales tax. The second is equivalent to a payroll tax, which is even more regressive. The third is applied to all shareholders equally, so a working class family with a pension pays the same as a billionaire. It is better to just get rid of corporate taxes, and co

    • by Anonymous Coward

      No, that is wrong. The larger a corporation is, the more likely that it is reducing total employment, reducing product choices for customers, and taking advantage of its size and market share to keep prices higher and reduce competition. Corporations are artificial constructs created by law for the purpose of improving the economy. It is possible that corporations should be subject to a progressive income tax in order to discourage them from getting too large, but that is probably not easy to do well, nor t

      • by thomn8r ( 635504 )

        Corporations are artificial constructs created by law for the purpose of improving the economy.

        Corporations are artificial constructs created by law to concentrate power and deflect liability.

    • by thomn8r ( 635504 )

      That will give small business owners the incentive to grow and create more high paying jobs.

      I can't believe you typed that with a straight face.

      • LOL, I admit I had a good chuckle writing it. You see, I'm home sick today with not much to do so I figured I'd write a quick troll on Slashdot and see if I could push anyone's buttons. As you can see, I've had a measure of success.

        The first moderation of the post correctly labelled it as "Troll", but I'm glad at least a couple of other moderators saw the humor in it.

        I've been reading Slashdot for some time, so I have a pretty good idea of how to "stir the pot"

        Cheers!

  • by thinkwaitfast ( 4150389 ) on Friday March 24, 2017 @11:20AM (#54102679)
    Here [wikipedia.org]
    • by Anonymous Coward

      This should be linked in more debates around here.

      So the USA is 10th in federal corporate tax rate, behind such global economic powerhouses as Greece, Argentina, Bangladesh and Pakistan. (in some states, we're only second behind Greece, yay 47% combined tax rate)

      Although, once you get down to the "basically 30%" range, there are a lot of nations, some struggling and some thriving. Another obvious trend is that the places with 0% corporate tax rate are mainly either tourism societies or wealthy exporters.

      L

  • Amazon made just $2.37 billion of profit in 2016...

    Such a small profit. How ever will they manage to feed their families...

    • Amazon made $2.37 billion, on over $400 billion invested. So an owner (investor) who put in $10,000 of their retirement savings made $59. Whoohoo!

      Due to inflation, $10,000 in 2015 was worth only $9,700 in 2016, so they actually LOST $241.

      Yeah, "making" less money than you're losing to inflation is pretty dismal.

  • So... why do they pay income tax, like people? And what means "corporate profit", anyway?

    Shareholders, customers, management, employees... these are the people who profit. Corporations are piles of paper. Every dime taxed away from these entities hurts these people. The corporations don't care one lick, since paper doesn't actually have feelings.

    Abolish corporate tax. Problem solved. The only people who would be opposed to such an idea would be the corporate tax attorneys, lawyers, accountants,
  • You sell stuff here. You pay your fair share in taxes. End of story!
  • The IRS was just helping Amazon have correct political views.

    Can you blame them for steering Amazon away from joining alt right groups, the tea party, CPAC, etc?

    Before you know it, Amazon would have been pushing Rush Limbaugh down our throats.
  • Multiple states have basically bluffed on the tax returns my CPA wife has done for a very large company.
    More than one time in the last few years, a state will reject a return. Says the company has to pay millions. 1 day before the tax court date, the state drops disagreement.
    3 states are trying to say that they agree that huge chunk of stock sold in another company investment capital gains, but hundreds of millions is company income in their state. So 3 different states are seeing big millions in capital ga

According to all the latest reports, there was no truth in any of the earlier reports.

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