WHEN JEFF BEZOS was deciding where to base his new e-commerce business in 1995, Seattle was not his first choice. Instead, the CEO of Amazon, now the world’s largest online store, eyed an Indian reservation near San Francisco that would have considerably lowered his tax bill.
The state of California quashed that scheme, but Bezos’s zeal for tax avoidance did not stop there. Throughout much of Amazon’s more than 20-year history, he has carved out competitive tax positions for the company as it expanded globally. His business acumen in that regard has even attracted the wrath of presumptive Republican presidential candidate Donald Trump, who earlier this year accused Bezos of buying The Washington Post to gain political influence and avoid taxes. During a speech in Texas, Trump said, “If I become president, oh do they have problems. They’re going to have such problems.”
Newly revealed documents seen by Newsweek from a landmark court case in Seattle between Amazon and the IRS reveal how the company has attained global dominance over competitors in part by moving its global headquarters to the small, landlocked state of Luxembourg. While Amazon’s corporate structure there has been well-documented, the court documents from Seattle shed new light on allegations of tax avoidance. They also raise questions about how and why Luxembourg handed one of the world’s largest companies a tax deal that private citizens can only dream of.