Shares of Amazon were briefly spooked in early morning trade after President Trump sent out a 6AM tweet attacking Amazon for “doing great damage to tax paying retailers,” adding “Towns, cities and states throughout the U.S. are being hurt – many jobs being lost!”
Amazon is doing great damage to tax paying retailers. Towns, cities and states throughout the U.S. are being hurt – many jobs being lost!
— Donald J. Trump (@realDonaldTrump) August 16, 2017
Source: FactSet
“While this is not his first tweet about Amazon and taxes (and of course, the Washington Post), we do find it interesting that he is now linking Amazon and job losses in traditional retail,” KeyBanc Capital Markets analyst Edward Yruma wrote in a note to clients Wednesday.
Treasury Secretary Steven Mnuchin hinted in July that the administration may soon take “a position” on Amazon’s tax collection policy.
Ongoing beef
Going back to February of 2016, Trump told a crowd “If I become president, oh [does Amazon] have problems. They’re going to have such problems.”
And in a series of tweets in July, Trump bashed the “Amazon Washington Post” several times, including one attacking the company for “not paying internet taxes.”
The #AmazonWashingtonPost, sometimes referred to as the guardian of Amazon not paying internet taxes (which they should) is FAKE NEWS!
— Donald J. Trump (@realDonaldTrump) June 28, 2017
That wasn’t entirely correct, as Amazon began collecting state sales tax nationwide for products sold directly by the company – so called “first-party” sales in states which collect.
What they don’t collect are taxes from their third party ‘marketplace’ vendors, making them more competitive than their brick and mortar peers.
As Dick’s CEO Ed Stack said yesterday, the retail industry is in ‘panic mode,’ and liquidating inventory to keep market share. “Dick’s is another example of Amazon becoming the new middleman… Here we go down the gross margin rabbit hole just in time for the holidays.”
Maybe Defense Secretary Mattis talked to ol’ Bezos about their tax policy during his visit to Amazon HQ in Seattle last week? Or perhaps Trump can ask Jared Kushner’s Democrat all-star attorney Jamie Gorelick – who sits on the board of Amazon – what the deal is?
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Amazon and the DoD are integrated:
“Amazon Web Services, Amazon’s cloud services company, has received a security authorization that would allow it to work with all agencies within the Department of Defense”
https://www.washingtonpost.com/business/on-it/amazon-web-services-authorized-to-contract-with-more-defense-department-agencies/2014/03/26/fbc5db08-b501-11e3-8cb6-284052554d74_story.html?utm_term=.b1adffd0a213
Amazon, like so many other Silicon Valley megacorps, depends upon government largesse. Maddog Mattis and Trump represent a major client.
But nobody is watching AliBaba – the largest ecommerce company in the world – with aggressive US expansion. They are moving into almost all of Amazon’s markets.