Amazon's New York headquarters could mean millions in tax breaks from Trump's tax plan | Eurasia Diary - ednews.net

15 December, Saturday


Amazon's New York headquarters could mean millions in tax breaks from Trump's tax plan

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  • Amazon announced it is splitting its second headquarters, or "HQ2", between Virginia and the the Long Island City neighborhood of Queens in New York City.
  • Long Island City is a designated "opportunity zone," a tax benefit scheme that was rolled out as part of President Trump's tax reforms.
  • Opportunity zones are meant to encourage businesses to invest in low-income areas, but critics have pointed out that Long Island City is not low-income.

Amazon announced on Tuesday that its second headquarters, dubbed "HQ2," will be split between the Long Island City neighborhood of Queens, New York and Arlington, Virginia.

Reports emerged on Wednesday that the Long Island City location could give Amazon and other investors in the area considerable tax breaks, as it is part of an "opportunity zone."

Opportunity zones were introduced as part of President Trump's tax reforms, and offer tax benefits worth potentially millions of dollars to companies for investing in low income areas.

Some critics have questioned why Amazon's new neighborhood is eligible, as its median income is $130,000. "All you have to do is look at the skyline from Manhattan. You can see billions of dollars of private investment there already... Long Island City doesn't strike me as high on the list for needing extensive tax incentives to stimulate economic development," New York real estate developer Don Pleebles told Associated Press.

New York has also offered Amazon incentives upwards of $1.5 billion to settle there, meaning it is effectively subsidizing each of the 25,000 jobs Amazon plans to create to the tune of $48,000, according to Amazon's HQ2 announcement.

Read more: New York City has lured Amazon with more than $1.5 billion in incentives — here's what else they agreed to

However not all opportunity zones are themselves low-income, but border on other areas that might be, as per New York Business Journal.

Using the tax benefits, Amazon may be able to defer tax payments for years by investing its capital gains into an "opportunity fund" which can then be used to buy property in opportunity zones. Amazon will be eligible if it invests in public infrastructure, which according to its HQ2 announcement is exactly what it plans on doing.

Per its statement (emphasis ours):

"The community will benefit from New York City providing funding through a Payment In Lieu Of Tax (PILOT) program based on Amazon's property taxes on a portion of the development site to fund community infrastructure improvements developed through input from residents during the planning process. Amazon has agreed to donate space on its campus for a tech startup incubator and for use by artists and industrial businesses, and Amazon will donate a site for a new primary or intermediary public school. The company will also invest in infrastructure improvements and new green spaces."

Amazon did not immediately respond to Business Insider when asked whether the tax breaks had influenced its decision to settle in Long Island City.

Business Insider

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