Billions in tax breaks offered to Amazon for second headquarters

22 October 2017: Amazon.com Inc (AMZN.O) is receiving offers of billions of dollars in tax breaks and other subsidies from cities and states across North America that are participating in a company contest to pick a location for its second headquarters.

Elected officials are eager for the $5 billion-plus investment by Amazon and up to 50,000 new jobs that will come with “HQ2.” For its second campus, Amazon wants a metropolitan area of more than a million people with good education, mass transit and likely lower costs than its home base in Seattle.

Amazon has said it will announce a decision next year.

“There is no better place to do business than Canada,” Prime Minister Justin Trudeau said in an Oct. 13 letter to Amazon’s Chief Executive Jeff Bezos, seen by Reuters.

New Jersey proposed $7 billion in potential credits against state and city taxes if Amazon locates in Newark and sticks to hiring commitments, according to a news release from the governor’s office earlier this week.

A report from the California governor’s office seen by Reuters said Amazon could claim some $300 million, and a bill in the state’s assembly introduced Thursday could offer Amazon $1 billion in tax breaks over the next decade.

And in a far different proposal, 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.

Amazon’s need to compete for tech talent with Silicon Valley companies such as Google (GOOGL.O) likely places the HQ2 prize out of reach for some smaller cities.

Moody’s Analytics Inc has ranked Austin, the headquarters of Amazon’s subsidiary Whole Foods, as the favorite.

“The cities I talked (to) all know they are being taken and resent it,” said urban studies expert Richard Florida, a professor at the University of Toronto’s Martin Prosperity Institute. However, cities expect some indirect benefits from the contest, such as closer ties to state and regional officials, he said.