Members of the political left took to social media last week to tell citizens that Amazon, one of the largest companies in the United States, would not be paying federal taxes in 2019.

Both Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez, Democrats with socialist leanings, used twitter to spread the news about Amazon.

Sanders took to his Twitter account to say that “Amazon made $16.8 billion in profits over the past two years but have paid ZERO in federal income taxes. In fact, it got a $269 million tax refund. Our Job: Demand large corporations pay their fair share in taxes so that we can rebuild the disappearing middle class.”

The news will surprise, shock, and potentially infuriate some Americans. However, it’s important to look at the facts behind the headlines, as they can be obscured by political rhetoric.

Amazon Won’t be Paying FEDERAL Taxes

The big distinction here is between the type of taxes. Amazon has not simply gone through the last year without a tax bill. While the company won’t be paying federal taxes this year, it will still pay state and local taxes for 2018. It will also pay taxes in international territories where it operates. In total, the company will pay $1.184 billion in taxes for 2018. That figure is notably higher than zero.

It’s also important to consider the reason why it doesn’t have a federal tax bill this year. In past years, Amazon endured operational losses that made tax credits available. These credits are fully legislated and designed to help companies sustain themselves through the dips in their performance. Amazon has not evaded taxes but has instead taken advantage of tax structures designed by the United States government.

Yes, Amazon Will Receive a Tax Refund

News sources revealed that Amazon would receive a $129 million federal tax refund for the 2018 tax year. This is true, and it is linked to credits and other benefits.

It’s important to note that they benefitted from the Tax Cuts and Jobs Act of 2017. The corporate tax rate shifted from 35% to 21%. This caused a significant recalculation and a provisional benefit for the company, contributing to recent refunds.

The Reality is Far Different to the Headlines

Amazon’s effective tax rate for 2018 was -1%, thanks to credits and refunds made possible by law changes and previous fiscal losses. They did not cheat the system or evade taxes, and in fact paid over $1 billion at state and local levels – money that goes directly back into communities.

It’s always critical to look beyond the highly emotive headlines, particularly when money and politics are involved.