The SEC's Jan. 22 response, this time from Mara L. Ransom, assistant director of the Office of Consumer Products, was: "If you are unable to identify or estimate research and development costs, please explain in detail the reasons for your inability. "
Accounting Standards Codification 730-10-55-1 lists activities that "typically would be considered" R&D, while ASC 730-10-55-2 lists those that typically wouldn't be. Amazon's argument was that its people tend to work simultaneously on things on both lists, so it couldn't separate the two. This did not initially convince the SEC's Thompson, who responded on Nov. 24:
Bob Bryan: Amazon avoids paying federal taxes using a variety of tax credits and tax exemptions that are legal and built into the U.S. federal tax code. Some of these can include the research and development tax credit which allows them to deduct some of the costs of new investments and also a big one for this past year was the ability to deduct stock-based compensation of executives.
Warehouse conditions In September 2011, Allentown, Pennsylvania's Morning Call interviewed 20 past and present employees at Amazon's Breinigsville warehouse, all but one of whom criticized the company's warehouse conditions and employment practice. Specific investigatory concerns were: heat so extreme it required the regular posting of ambulances to take away workers who passed out,[95] strenuous workloads in that heat, and first-person reports of summary terminations for health conditions such as breast cancer.[96] The Morning Call also published, verbatim, Amazon.com's direct response to a query by OSHA,[97] where amazon.com detailed its response when heat conditions reach as high as 114 °F (46 °C), including water and ice treatment, electrolyte drinks, nutrition advice, and extended breaks in air conditioned rooms.[98] Five days after the Morning Call article was published, Amazon stated that it had spent $2.4 million "urgently installing" air conditioning at four warehouses including the Breinigsville facility.[99] However, the original investigator states that when he checked back with current employees for his September 23 follow-up story, "they told him nothing had changed since his original story ran."[100]