Amazon’s Lobbying and Tax Giveaways Get Added Scrutiny

By NTK Staff | 10.16.2017 @12:47pm
Amazon’s Lobbying and Tax Giveaways Get Added Scrutiny

Company ups lobbying and donations for tax handouts and legislation to punish its competitors.

Yesterday, The Hill’s Reid Wilson profiled the efforts cities are going through to appeal to Amazon as it seeks to build a second headquarters in the United States. Those efforts include healthy packages of lucrative tax incentives for one of the world’s most profitable companies. As Wilson points out, this has led to legitimate concerns that “cities will offer too much”:

But some are concerned that cities will offer too much to win the company over. Amazon has proven adept at milking their hosts for tax incentives and credits in the past. A report this week by Washington Business Journal found that Amazon has secured more than $1.2 billion in incentives and breaks from state and local governments over the years. “This is a textbook auction. This thing is going to be taught in business schools,” said Greg LeRoy, who heads Good Jobs First, which keeps tabs on the deals local governments make to attract big companies. “The risk is that somebody’s going to overspend to pay Amazon to do what they were already going to do anyway.”

Amazon “has a long history of seeking and winning breaks from local governments” to the tune of $1.2 billion over the last several years:

The company has a long history of seeking and winning breaks from local governments. Texas forgave a $269 million sales tax bill the company owed after it pledged to spend $200 million on new facilities in the state, which brought 2,500 new jobs. Illinois officials gave the company $82 million in tax credits, and the Ohio Tax Credit Authority approved a package of $81 million over the course of 15 years. Kentucky officials offered $75 million for Amazon to expand operations at the Cincinnati/Northern Kentucky International Airport in exchange for 600 new jobs that average $26 an hour, according to a database of mega-deals maintained by Good Jobs First. The Business Journals tally showed Oregon officials had given more in tax incentives to Amazon, $213 million, than any other state. Texas, Maryland, New York and Tennessee have all given incentives valued at more than $50 million.

The taxpayer giveaways come as Amazon has built “one of the biggest corporate lobbying shops in town,” having spent $11.3 million last year on lobbying. Today, Amazon spends more than Exxon and Walmart on lobbying lawmakers and government officials:

This year, Amazon has increased its lobbying staff to 83 members from 60, making it one of the biggest corporate lobbying shops in town. The company is also on its way to surpassing its previous high for lobbying spending: $11.3 million last year. The $6.2 million Amazon spent in the first two quarters of this year was the 11th most among companies, above Exxon and far above Walmart, which spent $3.6 million in the same period.

The Washington Business Journal also just profiled Amazon’s Washington, D.C. operation, noting that “since 2000, the company’s lobbying has multiplied by a factor of 23”:

Perhaps the most potent way Amazon is inserting itself into Washington’s conversations is also the least visible — through its skyrocketing lobbying budget. Amazon has written $6.23 million worth of lobbying checks this year, as of Aug. 7, according to the nonpartisan Center for Responsive Politics, which tracks lobbying spending. It’s on pace to rival last year’s record spending, $11.35 million, itself a 130 percent spike from only two years prior. Since 2000, the company’s lobbying has multiplied by a factor of 23.

In 2017 alone, Amazon has used 77 lobbyists, and its in-house government affairs team has grown from 2 employees to 21 today:

So far this year, it’s used a total of 77 lobbyists, including professionals from Squire Patton Boggs, Akin Gump, Ballard Partners, Brownstein Hyatt, Capitol Tax Partners, McGuireWoods and Monument Policy Group. Ten years ago, it counted 23. “Look at the list of firms they have under contract, too,” said Steven Billet, director of the legislative affairs master’s degree program at George Washington University. “I mean, it’s an A-list. These are pretty effective outfits, all of which have some great reputations in town.” Billet, who spent years working as a lobbyist for AT&T before becoming chief of staff at GWU’s Graduate School of Political Management, also points out that Amazon’s in-house government affairs team has grown exponentially as well, from two employees 10 years ago to 21 today.

In addition to the tax incentives, the heavy D.C. lobbying appears to be a larger play to use the government to impact Amazon’s competition. Amazon is heavily pushing the Remote Transactions Parity Act, which some have concluded would bury Amazon’s small competitors in regulation and ultimately push many of them out of business due to the costs. The Republican who introduced the bill, Rep. Jason Chaffetz (R-UT), “was the largest Republican recipient of political donations from the main Amazon PAC and company employees in the 2016 cycle” according to the Washington Business Journal:

So just what issues are on the company’s radar? Amazon has filed the most lobbying reports this year — 17 in all — on tax measures, making it the 12th most frequent lobbyist on that topic nationwide. A key example: the Remote Transactions Parity Act in the House and a similar Senate bill, which would essentially require online retailers to collect sales taxes in all states regardless of whether they have a physical presence there. … Rep. Jason Chaffetz, the Utah Republican who introduced the Remote Transactions Parity Act of 2015, was the largest Republican recipient of political donations from the main Amazon PAC and company employees in the 2016 cycle. The congressman, who resigned this year, received $10,000 from the PAC and $39,900 from employees.

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