Amazon’s controversial New York headquarters is no longer going ahead, with the online giant dumping its plans after receiving intense opposition.
The competition to win Amazon’s “H2Q competition” in 2018 turned into a nationwide bidding war of increasingly generous tax and other incentives.
Amazon announced in November that its planned US$5 billion second headquarters would be split between New York City and Virginia.
In New York, the company was set to received US$1.5 billion worth of performance-based incentives and a total US$3 billion in subsidies and tax breaks from the state and the city.
Criticism followed that an influx of Amazon’s employees – with an average $150,000 a year salary – would cause housing prices to skyrocket and push out low-income residents.
“After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens,” the company said in a blog post.
“We are disappointed to have reached this conclusion. [W]e do not intend to reopen the HQ2 search at this time.”
Progressive voices, like New York Democrat Alexandria Ocasio-Cortez, derided Amazon’s search for a second headquarters as a “thinly-veiled” attempt to extract maximum tax concessions.
Meanwhile, the tech giant’s tax bill for 2018 has been filed, showing that Amazon paid no federal income tax.
The statutory federal tax rate is 21 per cent.
Amazon received a federal government rebate of US$129 million, pushing its tax rate to negative 1 per cent.
The company reported a $11.2 billion profit, nearly doubling its previous $5.6 billion the previous year.
The report was published by the Institute on Taxation and Economic Policy.