Amazon’s HQ2 attracts major bids from Canada and US states offering tax breaks
American states are queuing around the block to offer Amazon massive tax breaks to build their new headquarters, which is expected to cost roughly $5bn (£3.8bn).
The new complex, dubbed HQ2, will bring up to 50,000 new jobs with it, but Amazon has set forward a number of criteria.
It has said wants a metropolitan area of more than a million people with good education, mass transit and lower costs than its home base in Seattle (pictured above).
Moody’s Analytics has ranked Austin, the headquarters of Amazon’s subsidiary Whole Foods, as the most likely spot to build HQ2, although a number of other states have put in attractive offers. New Jersey, for example, has proposed $7bn in potential credits against state and city taxes if Amazon locates in Newark and sticks to hiring commitments.
A report from the California governor’s office said Amazon could claim some $300m, while legislation is being considered for 2018 that could offer the company an even larger $1bn in tax breaks over the next decade.
Meanwhile, the mayor of the Atlanta suburb of Stonecrest, Jason Lary, said his city would use 345 acres of industrial land to create a new city called Amazon. Bezos would be its mayor for life, Lary said.
New Hampshire warned Amazon not to choose nearby Boston, saying in a report posted online: “When you leave your tiny $4,000-a-month apartment only to sit in two hours of traffic trying to make your way to an overburdened airport, you’ll be wishing you were in New Hampshire.”
Milwaukee’s bid touted its proximity to Chicago, a nearby competitor, arguing that Amazon could tap that city’s workforce and amenities while avoiding its congestion and high costs of living.
“We consider Chicago one of our finest suburbs,” said Milwaukee mayor Tom Barrett.
Many governments have declined to discuss the tax packages they are offering for fear of tipping off rivals. The bid by Austin, for example, is confidential and Missouri’s has a non-disclosure agreement with Amazon.
Offers have extended even beyond the US, with Canadian Prime Minister Justin Trudeau proclaiming: “there is no better place to do business than Canada” in a letter addressed to Amazon’s chief executive Jeff Bezos earlier this month.
Amazon has said it will announce the final decision next year.
Since its beginnings as an online bookseller in 1994, Amazon has had a savvy approach to taxes, collecting no sales tax for many purchases until recent years, and now pitting governments against each other to win tax breaks.
However, earlier this month the online retailer was slapped with a hefty €250m (£222m) tax bill by the EU after it was deemed that the company was given an unfair tax advantage after it entered into a sweetheart tax deal with Luxembourg in 2003.