Presumed Republican presidential candidate Donald Trump accused Amazon founder Jeff Bezos of using The Washington Post, one of Bezos’s assets, to influence legislature and shield Amazon from taxes.
“Amazon is getting away with murder, tax-wise,” Trump told Fox News on May 12. “He’s using The Washington Post for power so that the politicians in Washington don’t tax Amazon like they should be taxed.”
Trump further said Amazon has a “huge antitrust problem.”
Trump is most likely referring to the collection of sales taxes by online retailers.
Online retailers only have to collect sales taxes in states where they have a physical presence. If they don’t, buyers should calculate and pay the tax themselves. But most people don’t, according to a 2012 Forbes article
That gives online retailers competitive advantage over brick-and-mortar stores.
Amazon has been using this advantage, but recently less so. As the retailer has opened warehouses in more states, it has started to collect sales taxes as well.
As of June 1, 2015, Amazon was collecting sales tax in 25 states, covering 77 percent of the country’s population, according to the Institute on Taxation and Economic Policy.
Amazon expressed support for a legislation that would make it easier for states to collect sales tax from online retailers.
The legislation has been criticized for stifling small businesses and startups that would have to figure out what tax to charge, what’s exempt, what tax holidays apply, how to pay sales taxes in different states, and more.
That may be a reason why Amazon supported the bill, the Marketplace Fairness Act, as the company already has a system in place for paying sales tax in many states and thus would have an advantage over competitors who don’t.
Moreover, many online retailers who don’t have a physical presence in most states still don’t collect the tax and now enjoy a competitive advantage over Amazon.
Trump also referred to an unspecified article that said, according to Trump, that Bezos is afraid that if Trump is elected president, he would “go after him for antitrust.”
It is not clear what should have led Bezos to be afraid of Trump’s cracking down on antitrust issues. It seems Trump hasn’t been outspoken on the issue during his campaign.
Last year Trump wrote about Bezos on his Twitter, jabbing at Amazon over its profitability and making a similar accusation about The Washington Post.
The @washingtonpost, which loses a fortune, is owned by @JeffBezos for purposes of keeping taxes down at his no profit company, @amazon.
— Donald J. Trump (@realDonaldTrump) December 7, 2015
The @washingtonpost loses money (a deduction) and gives owner @JeffBezos power to screw public on low taxation of @Amazon! Big tax shelter
— Donald J. Trump (@realDonaldTrump) December 7, 2015
If @amazon ever had to pay fair taxes, its stock would crash and it would crumble like a paper bag. The @washingtonpost scam is saving it!
— Donald J. Trump (@realDonaldTrump) December 7, 2015
Bezos responded by Tweeting he would send Trump to space in one of his company’s (Blue Origin) rockets.
Finally trashed by @realDonaldTrump. Will still reserve him a seat on the Blue Origin rocket. #sendDonaldtospace https://t.co/9OypFoxZk3
— Jeff Bezos (@JeffBezos) December 7, 2015
As to the taxation and profitability of Amazon, here’s a graph of Amazon’s profits and income taxes expenditures (both foreign and domestic) over the past 15 years. The company’s filings with the U.S. Securities and Exchange Commission suggest the majority of its business and income tax earned are domestic.
