Amazon could receive more than $2 billion in tax incentives across the two top locations, the company said in its announcement. Up to $1.2 billion of that will come from New York state’s Excelsior program, a discretionary tax credit. In Virginia, the company could receive up to $550 million in cash incentives from the state.
Plainly both New York and Virginia will be low-tax environments for Amazon (not for small competitors, though! The Tax Foundation ranks New York almost dead last in business tax climate; only California and New Jersey are more punishing places to have a company), but how exactly are the “tax incentives” ladled out?
Amazon will pay less in state income tax? In payroll taxes? In property taxes? A combination of these taxes?
“The mystery tax breaks bringing Amazon to LIC; New York has an incentives package for Amazon, but taxpayers may never know what’s in it” talks about “tax credits,” but doesn’t say if these are credits against state income tax or local property tax or what.
[Separately, anyone planning to sue an Amazon employee for child support or alimony should probably wait for the lawsuit target to be transferred from Washington (capped child support and limited alimony) to New York ($100,000 per year in tax-free child support readily obtainable and far longer taxable alimony duration). New York enables child support profits to be collected through age 21, while Washington cuts them off at age 18. New York is also more favorable for plaintiffs seeking to obtain sole custody of a child (see TMZ for why it was smart for Katie Holmes to sue Tom Cruise in New York rather than in California). For plaintiffs suing the very highest Amazon earners, the Virginia location offers unlimited child support by formula, but a child stops yielding cash at age 18.]
I wonder if the Amazon New York location will end up presenting the nation’s largest contrast in leisure time. “Amazon’s New Neighbor: The Nation’s Largest Housing Project” (nytimes) says that 6,000 people who have no financial incentive to work (they may actually suffer reduced spending power by working due to the welfare system structure) will live right next to people that the same newspaper says are essentially slaves (see “Inside Amazon: Wrestling Big Ideas in a Bruising Workplace; The company is conducting an experiment in how far it can push white-collar workers to get them to achieve its ever-expanding ambitions.”: “When you’re not able to give your absolute all, 80 hours a week, they see it as a major weakness,” she said.)
Readers: What do you think of New York residents paying the nation’s highest tax rates (tied with California?) so that Amazon can be in NYC but be taxed more like a business in Florida or Nevada?
Also, does this mean that the New York transportation system will melt down? How can it handle 25,000 more commutes per day via subway, Uber, private car, train, etc.? Every mode of transit in NYC (even walking in Midtown!) seems to be gridlocked and/or overburdened currently.