The war of words between top American retailers is hotting up. The Amazon prime debate had its trigger from Amazon boss Jeff Bezos who challenged competitors to match up their worker pay with that of Amazon.

Now rivals have hit back and put Amazon on the defensive in the matter of paying federal taxes.

Bezos annual letter to shareholders on Thursday said this.

"Today I challenge our top retail competitors (you know who you are!) match our employee benefits and our $15 minimum wage. Do it! Better yet, go to $16 and throw the gauntlet back at us. It's a kind of competition that will benefit everyone."

Walmart's taunts on tax

In a quiet, yet firm reply, Dan Bartlett, Walmart's executive vice president of corporate affairs took to Twitter and shared an article that said Amazon paid no federal taxes last year despite making a humungous $11 billion plus in profits.

Barlett also wrote: "Hey retail competitors out there (you know who you are) how about paying your taxes?"

The jibe of eBay chief, Devin Wenig followed, who snapped back: "I'll dedicate my [shareholders] letter to customers, purpose, and strategy."

His tweet; "We don't compete with our sellers. We don't bundle endless services to create barriers to competition," were quite vivid.

Amazon's defense

Contesting the perception that Amazon was avoiding federal taxes, a spokesperson of Amazon said the assumption was unfounded and highlighted its contribution to creating a quarter million jobs in the U.S.

Noting that Amazon pays all taxes required to pay in the U.S. and every country it operates, the spokesperson said it paid $2.6 billion in corporate tax and had $3.4 billion in tax expense in the last three years.

But rivals continue to take pot shots at Amazon not having to pay anything to the IRS.

Democratic presidential candidate Elizabeth Warren's proposal to slap 7 percent tax on companies who report more than $100 million in profits has Amazon as a specific target.

It is true that there is an obvious difference in the minimum wage between Walmart and Amazon. The former revised its minimum wage to $11 an hour in January 2018 and Amazon made it to $15 in November.

But Walmart makes the claim that its average workers earning is actually $17.55 an hour if related benefits are also factored in.

Amazon was also under fire for poor pay prior to raising the minimum wage to $15. Democrat leader Bernie Sanders even moved legislation named as "Bezos Act" to slap a tax on corporations for making their low-wage workers earn government health-care benefits and food stamps.

Walmart aiming big money from retail digital ads

Meanwhile, Walmart is readying to make money from omnichannel advertising to catch up with Amazon's success in that front.

Walmart is reportedly acquiring Polymorph Labs, advertising startup in Silicon Valley for that purpose.

"Ultimately, the acquisition of Polymorph technology will enable both existing and new advertisers to control their ad spending with us and reach their desired audiences more effectively," said Stefanie Jay, VP of Walmart Media Group.

In the retail digital retail advertising space, Facebook and Google were leaders until Amazon caught up with them.

According to marketers, Amazon has notched up 14 percent of digital ad spend share and is at a close third behind Google's 21 percent and Facebook's 19 percent.

This article originally appeared in IBTimes US.

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