I wonder what the tax treatment would be - I think company housing might not be taxed as income in this case (on prem, required to work there, etc), allowing them to pay much lower effective rates for labor by baking the cost of housing into a paycheck and pocketing the tax savings.

Correct, employer provided housing not taxed in certain cases, so you get some massive tax savings this way. Be interesting to see what argument amazon might make. Needs to be:

* The housing is provided on the property owned by the business or employer. * The housing is provided for the convenience of the employer. * The employee must accept housing as a condition of employment.

Intended more for folks like on-call firefighters living in a firehouse or a park ranger who is required to live in a cabin in a park or nanny's staying with their family. I could see some situations amazon might have an argument to make - they could probably do micro-units or shared housing / dorm style housing for workers and save massively on labor costs especially in high cost urban areas where folks would otherwise never be able to afford a place.

There’s not a fucking chance that’s legal

Employee benefits are routinely taxed differently. Health insurance, 401ks, some meals, etc.

Most likely, it'd be considered a "fringe benefit" and the employee would still have W2 / income taxes and withholdings on it. How municipalities would tax the property value depends entirely on how they choose to tax on-site housing (as it is technically both commercial and residential space).

Maintenance on the buildings would likely be partially deductible as operating expenses, no different than any other building operated by a landlord or business.

The illegal aspect only pertains to doing something like this and not paying relevant taxes. Companies have been providing their employees housing for hundreds of years. Trump Org was perfectly free to provide employees apartments, provided appropriate tax filings and payments were made.