Amazon Scoops Bumper US Tax Breaks - Read How

Amazon.com Inc AMZN has won $650 million in tax breaks in 2021 from local and state governments, the Financial Times reports based on Good Jobs First data.

What Happened: That is how governments lure the online shopping giant into expanding its one-day or same-day delivery networks in their areas. Amazon had won over $750 million in 2019 to build its "second" headquarters in Arlington, Virginia.

The boost in Amazon's delivery network deals follows local authorities' struggle with rebuilding their economies and job markets in the wake of the pandemic that drove Amazon's profits due to its pivotal role in distributing goods during the lockdown and beyond. 

Good Jobs First analyst was against subsidizing the wealthy companies. Amazon defended by highlighting its job creation record and lapping up offers for any business, not just Amazon.

Why It Matters: In 2020, Amazon invested $150 billion in the U.S., opened over 100 sites, and created over 400,000 jobs across over 40 states. It has won a minimum of $4.1 billion in incentives since 2000.

Amazon's capital expenditure rose from $16.8 billion in 2019 to $40.1 billion in 2020 and reached $26.4 billion as of Q2 2021 as it aggressively added warehouses to cut delivery times in more markets across the U.S. Meanwhile, Amazon petitioned local officials for incentives, including threats to quit on nonfulfillment of demands while also agreeing to continue despite its demands not being met.

The current hourly wage for Amazon drivers in New Jersey is $19.25, versus United Parcel Service Inc's UPS $38.35. Amazon has a $3,000 signing-on bonus due to the nationwide worker crisis.

Price Action: AMZN shares traded lower by 0.78% at $3,195.75 in the premarket session on the last check Wednesday.

Photo by Gerd Altmann from Pixabay