From e-tail to retail, data centers to fulfillment centers, and forays into industries as varied as health care and space, Amazon’s race to take over the world has resulted in over $500 billion in U.S. infrastructure investments over the last 10 years. According to the company, Amazon has created more jobs in the U.S. than any other firm in the past decade through direct employment and the support of independent sellers.
Amazon received massive tax breaks unprecedented in American business due to its economic contributions and stimulation. State and local governments offer Amazon tax incentives in the hundreds of millions of dollars to attract investments such as warehouses and employment. Thus, de facto bidding wars occur between cities and states looking to boost capital spend and job creation.
The courtship between local governments and Amazon is far from one-sided. The firm has an aggressive strategy of pursuing tax abatements around the world. Since 2012, it’s funded and maintained a special department specifically focused on winning tax breaks globally. This murky practice forces taxpayers to subsidize a company notorious for poor working conditions and anti-organized labor with a poor-to-negative return on investment to local economies.
So, which state’s taxpayers are subsidizing Amazon the most?
To find out, Switch On Business used data from non-profit watchdog Good Jobs First to rank U.S. cities, states, and counties based on tax subsidies given to Amazon overall and as a percentage of GDP.
Insights
- Since 2000, Amazon has received nearly $7 billion in recorded tax breaks from state and local governments.
- Oregon taxpayers have subsidized Amazon more than any other state, with over $1.5 billion in tax breaks for the corporation.
- Seattle (Amazon’s hometown) has given the tech giant over $600 million in tax breaks for its corporate offices, the most of any city.
Nearly $7 Billion and Counting
Since 2000, Amazon has received nearly $7 billion in recorded tax breaks from state and local governments. However, the amounts of these subsidies vary from state to state due to closed-door negotiations between the company’s representatives and local officials.
While the bulk of tax breaks go to the constructing distribution centers, municipalities have also given subsidies to attract data centers, offices, Amazon Studios locations, and Whole Foods supermarkets.
Municipalities in Oregon have granted Amazon a total of $1.5 billion in tax subsidies since 2000, which is by far the most of any state. Port of Morrow’s five-member commission in eastern Oregon granted a bulk of the tax incentives. In 2023, officials approved an estimated $1 billion in tax breaks—more than half of Morrow County’s annual GDP—towards constructing five new AWS cloud-computing data centers, making it the largest subsidy in Amazon’s history. While local officials contend that the deal will secure $12 billion in investment from Amazon, critics questioned the data center’s job creation prospects and investigated potential conflicts of interest in the agreement.
Illinois, New York, Texas, Virginia, and Washington are other states that have shelled out hundreds of millions of dollars in tax breaks. In 2019, Arlington, Virginia, won the bid to host Amazon’s second headquarters by agreeing to $750 million in tax breaks for the tech conglomerate. At the time, that was the biggest subsidy Amazon had ever received. The first construction phase of the second headquarters was completed and opened in June 2023. However, the second phase stalled after mass layoffs and company-wide restructuring.
Small Towns, Huge Subsidies
Larger states offer bigger total tax incentives, but adjusting for GDP reveals which states are giving up the most potential tax revenue to Amazon relative to the size of their economy. For example, Oregon’s tax subsidies to Amazon since 2000 amount to $4,839 per $1 million in annual state GDP—the most of any U.S. state and more than 10 times the national average.
In February 2024, state and local lawmakers approved an incentive package worth over $259 million for the construction of two AWS data centers in Madison County, MS, including payments for improvements to roads and water systems around the chosen sites, job training programs, and a 100% corporate income tax exemption on the data centers. While the deal is not without its detractors, the massive project—projected to bring $10 billion in capital investment to Madison County—highlights how small municipalities can leverage tax incentives to attract big business.
Cities Giving Up Hundreds of Millions in Potential Tax Revenue
Aggregating tax subsidies at the city level can reveal if cities are influencing Amazon’s site selection process—or if Amazon is taking advantage of them.
For example, after a secretive negotiation process, public officials in Chicago approved a $322 million tax abatement for an Amazon warehouse in Markham, leading many residents to protest the lack of community input regarding the decision and debate the merit of the lost tax revenue. Conversely, a tax break worth $176 million allowed Hermiston, a small city in Oregon with a population of just 19,400, to secure an AWS data center projected to bring in $10 million in annual revenue.
Meanwhile, no city has subsidized Amazon more than its hometown of Seattle. Over the last decade, it has granted Amazon over $600 million in tax breaks for its corporate offices, by far the most of any city. Many Seattle officials have advocated increasing taxes on Amazon to offset the subsidies, as the city is mired with civic problems and budget issues.
Divisive Subsidies in Top Counties
All sorts of counties have contributed to subsidizing Amazon. Big and small, urban and rural, all throughout the country. Four of the 20 counties that give the most subsidies to Amazon are in Oregon, where Amazon has aggressively lobbied for generous tax breaks for its costly data centers. The conglomerate has also found success in Mississippi, where three of the top 20 counties (Madison County, Marshall County, and DeSoto County) are located.
Small economic development boards decide massive tax breaks that result in millions of dollars in lost tax revenue, sparking fierce controversy. Take Morrow Country, for example. It gave Amazon $1.3 billion in tax breaks, which prompted an investigation into potential conflicts of interest between the company and local officials. Similarly, critics in nearby Umatilla County—which has given $55 million in tax breaks for Amazon data centers—have decried the poor tradeoff between added jobs and increased greenhouse gas emissions from the power-hungry centers.
Secret Deals, Unclear Benefits
In its quest to maximize both footprint and profit, Amazon has sought to expand its network of distribution centers, data centers, and offices throughout the United States while paying as few taxes as possible.
Tax incentives can help unattractive and uncompetitive markets compete for Amazon’s business. However, the tech behemoth’s gamification of the site selection process has led to intense bidding wars between cities. This resulted in unprecedented tax breaks, leading some community stakeholders to question whether the lost corporate tax revenue is worth the additional economic activity.
Ironically, tax abatement deals are decided upon privately by public officials and Amazon representatives. Officials are bound by nondisclosure agreements, and specific details are hidden from the community members they affect the most. So, while most of the U.S. population uses Amazon, even those who prefer to shop in person may indirectly fund the e-commerce and tech giant through tax subsidies. And as Amazon’s profits continue to soar, shaping labor, the environment, and culture in their wake, it is all the more important to know: how are you subsidizing Amazon?
Methodology
We sourced the data for individual subsidies awarded to Amazon across the United States from Good Jobs First’s Amazon Tracker. This dataset tracks state and local economic development subsidy deals given to Amazon.com, Inc. for its warehouses, data centers, and film productions and to its subsidiaries, such as Whole Foods Market, Zappos, and Audible.
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