Income tax is owed on net profit; which is sale proceeds minus expenses. Amazon had a few expense categories that were very large.
Employees are paid through stock plans where Amazon's expense is the future value of its stock. Employees get paid in stock in year 1 but can't use/sell the stock until a future year. So Amazon is deducting the expense of old payments of stock that has now an increased value. In the last 5 years, Amazon's stock value has increased over 600%. Also, Amazon has increased its hiring of employees by 164% between 2016 and 2018.
Another large expense category was spending on research and development. Not only did they set the historic record for spending on research and development in 2018 but they qualified for an old research and development income tax credit. This research spending goes into cloud computing, their voice-based Alexa devices, etc.
The last 2 expense categories worth mentioning are building construction/maintenance and carryforward of losses from prior years. Amazon has built more offices, warehouses, retail, and data centers between 2016 and 2018 than it has in its 20 year history.
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