‘Quill creates rather than resolves market distortions. In effect, it is a judicially created tax shelter for businesses that limit their physical presence in a State but sell their goods and services to the State’s consumers, something that has become easier and more prevalent as technology has advanced.’

Supreme Court of the United States, 2018³⁷

Meanwhile, in its search for a second headquarters in 2018, Amazon solicited bids from cities and regions across North America, promising $5 billion in investment and 50,000 new jobs over the next decade. The Hunger Games-style competition resulted in over 200 bids, with extraordinary offers ranging from New Jersey’s $7 billion in tax incentives to Chicago’s promise that employees would have to pay part of their salary back to Amazon as ‘income tax’.

In Europe, Amazon’s tax structure has been equally controversial. After over a decade of channelling sales through entities in Luxembourg, in 2015 Amazon began accounting for sales and paying taxes in Britain, Germany, Spain and Italy. The EU has since ordered Amazon to pay back €250 million in taxes, the result of an unfair tax break the company was given by Luxembourg in 2003, and has proposed a new 3 per cent digital tax on revenues – rather than profits – of large tech companies.

Meanwhile, in the UK, a 2017 revaluation of business rates disproportionately benefited Amazon and other online retailers. The rates, deemed by many as archaic, were calculated to take into account the rise in property prices since 2008; as most of Amazon’s warehouses are located out of town, they actually saw their value (and therefore business levy) decline while many high street retailers saw their bill go up – some by up to 400 per cent. Another massive competitive advantage for Amazon.

Amazon’s tax fight is far from over. President Trump, who himself said during the 2016 presidential debates that not paying his own taxes makes him ‘smart’, now has a bee in his bonnet over Amazon’s tax planning. Ironically, the Trump Administration’s 2017 Tax Act – which saw the rate slashed from 35 per cent to 21 per cent – is directly benefiting Amazon. In 2018, the retailer reported a provisional tax benefit of nearly $800 million.³⁸ Still, the threat of greater scrutiny looms, but more on this later.