backtop

Print 38 comment(s) - last by Kepler.. on Aug 4 at 8:01 AM

  (Source: amazonaws.com)
Apple agreed to invest $1 billion into the state for a 10-year period in return

Even Apple's cloud has a silver lining -- it just sealed a deal to receive $89 million in tax breaks from the state of Nevada, where it will build an iCloud data center.

Apple and the Nevada Board of Economic Development reached an agreement today that gives Apple $89 million in tax breaks while the tech giant has vowed to invest $1 billion into the state for a 10-year period.

Washoe County will give Apple an 85 percent tax break on its personal property taxes while Reno will give it a 75 percent tax break on a downtown business center.

Apple will certainly be giving back with its $1 billion investment over 10 years, which could be extended to another two 10-year periods if the company keeps up its end of the deal during the first round.

Apple is also getting ready to build a 35-acre data center for its iCloud services in Reno, where it will hire 35 full-time workers and 200 contract workers. Apple plans to start the construction process in August and complete the data center by the end of 2012.

The purchasing and business center will be built near downtown Reno and is expected to bring in $340 million to the area over the next decade.

This is the first agreement negotiated under the new state law, which allows the executive director to make decisions without the board's approval.

"If we had not implemented that statute, we would not have Apple here," said Steve Hill, head of the Governor's Office of Economic Development.

Apple currently has three data centers in the U.S., located in Maiden, North Carolina; Newark, California; and one currently being built in Prineville, Oregon. The tech giant announced that it plans to power its Maiden data center with 100 percent renewable energy this year, and will do the same with the other two by early 2013.

In April, The New York Times accused Cupertino-based Apple of dodging millions in taxes in the U.S. (billions in taxes worldwide) by a few methods, including putting an office in Reno, which allows Apple to escape California's 8.84 percent tax rate for Nevada's 0 percent; selling digital content, which can be sold from low-tax countries anywhere around the world, and the "Double Irish With a Dutch Sandwich," which allows Apple to cut taxes by directing profits through low-cost Irish subsidiaries, the Netherlands and the Caribbean.

Source: Fox Reno


Comments     Threshold


This article is over a month old, voting and posting comments is disabled
Long live the king.
By Coldfriction on 8/2/2012 11:08:53 PM , Rating: 2
Capitalism is dead! Long live crony capitalism! Apple does not need these breaks. These goverments have decided their job is to generate revenue, not to protect the rights of their people or engage in promoting general welfare. No way would I ever want my representatives to willingly favor one business over another and especially not Apple. Entitlements for the rich are as bad as entitlements for the poor; these property tax breaks should be across the board for all businesses or they shouldn't exist.




RE: Long live the king.
By xti on 8/2/2012 11:37:20 PM , Rating: 5
man, every single dell, hp, intel, amd etc office in any city, or heck in most overseas countries get the same damn thing.

Everything is apple this and apple that on DT... its like apple and DT dated, and apple cheated on DT, so now DT is obsessed.


RE: Long live the king.
By othercents on 8/3/2012 9:01:36 AM , Rating: 2
Yup... Every company gets tax breaks when this many jobs could be brought to a city. The tax breaks get offset by the number of people who will be working and paying taxes.


RE: Long live the king.
By Felthis on 8/3/2012 9:23:00 AM , Rating: 2
It's not just tax breaks, but incentives can be in the form of cold hard cash.
http://www.roundrocktexas.gov/home/index.asp?page=...
Emerson got $1.75 million in grants from my city, Round Rock TX (near Austin), to move their Process Management Division Headquarters here. In order to receive those payments they must:
- Invest $25 million in facility improvements and personal property
- Transfer 750 existing jobs
- Add 125 new jobs over three years beginning Jan. 1, 2012
- Generate at least 10,000 hotel/motel nights per year in City
At around the same time they also increased the hotel tax rate :)
I consider it a big win for Round Rock as we get jobs, a lot more tax revenue, and more ancillary business growth.


RE: Long live the king.
By The Raven on 8/3/2012 12:36:20 PM , Rating: 2
I like how you phrased it as jobs "brought to a city."
I'm sure >half of these jobs will be people who can't afford California anymore. So the term "job creation" would be applicable only locally in NV. I don't mean to rain on NV's parade, but I don't live there and there is a larger national or even global problem. But good news for all the unemployed computer science majors there in NV.


RE: Long live the king.
By GotThumbs on 8/3/2012 12:36:47 PM , Rating: 2
Problem is....this will only create 35 Full-time jobs. The contractor is possibly a way to avoid issues with new health care law. Maybe.

Companies have been studying the new laws to see how they can operate around them. It's human nature to try and avoid the hills and valleys if its a slight detour.

Any politician who thought they could just implement this law and everyone would swallow this huge pill willingly...is a Twit.


RE: Long live the king.
By Ringold on 8/3/2012 1:17:50 PM , Rating: 2
quote:
Any politician who thought they could just implement this law and everyone would swallow this huge pill willingly...is a Twit.


I doubt many are twits; laws 100 years ago might be, at most, 10 or 15 pages. Now they can hit 10,000 pages. Not because there's really that much that needs to be said, but because politicians know all that and cram the laws full of things to strike back at their opponents and help their supporters. Like the health care bills tax on medical device manufacturers; what happened there, they didn't pay enough political protection money to the Democrats?


RE: Long live the king.
By TSS on 8/3/2012 9:09:53 AM , Rating: 3
It's apple themselves who've said they've got more cash then they know what to do with it. Appearantly it's not enough yet.

Still a good chance to call for tax reform. I mean if everybody gets the same damn thing, why don't we throw taxes for corperations out the window entirely? They're only hurting the little guy. If you're afraid to lose revenue just up the taxes on the population since they're paying for the corperate taxes anyway (either through tax breaks for corperations or price increases on the goods). It wouldn't be increasing taxes as much as properly documenting who really pays the tax anyway.

Corperations will also be able to afford to pay their workers more. And they will, since the workers en masse demand more since their taxes went "up" en masse.

Besides if you don't get a replacement revenue, whats the total income of corperate taxes in the US? like $200 billion? wikipedia says it's already around 1% of US GDP and heading down. On a federal deficit of $1,2 trillion that's hardly noticable anymore. Except in this case, since the companies can afford to hire since their expenses went down (talking small business here, the largest employer in the US), it *would* actually create jobs unlike other government stimulus, while being budget neutral if you raise taxes on the people just a lil bit. Which they won't mind if their income goes up so their *standard of living* stays the same (or, even increases if they don't have a job currently).

Or we can continue to debate why a company with $100+ billion in cash last time i checked needs a $89 million tax break, while they're already spending $1 billion in the area. Let me repeat that: $100,000,000,000 apple cash reserves, $89,000,000 tax break.

The only reason it happens is because if they don't, somebody else will, and since the companies have no morals or values they'll go for whoever offers them the most. It's just wrong. And we're all sheep for accepting it as "the way it is".


RE: Long live the king.
By Kepler on 8/3/2012 9:23:55 AM , Rating: 3
Either get rid of corp tax, or income tax. No reason to double (actually triple dip, with sales tax).

I vote get rid of income tax, and tax all business some flat % (20%?) on net profit. If a business reinvests in itself, it isn't taxed on that money. If it pays employees more, it isn't taxed on that money. Middle class America won't be giving 30%+ of their paycheck to the government.

There are just tons of benefits from taxing less.

There is no reason why I have to worry about spending more than I have, but the government doesn't.


RE: Long live the king.
By The Raven on 8/3/2012 12:13:46 PM , Rating: 2
I vote to get rid of corp and income tax and only have a sales tax. This way everyone knows how much they are paying for taxes instead of ignorantly saying "Taxes aren't too high."

Corporate tax is stupid because it is just a sales tax in disguise. Manufacturers just pass the tax on to the end user.
If it was a sales tax it would be known to the customer.

Income tax is lame because many people have to hire a guy to file for them every year. Plus we are forced to give the gov't a loan lol. And to top it off people who pay taxes get a return back at the end of the year and feel like they are coming out on top of the deal (and then vote to raise taxes).

With sales tax you also would collect more from those trying to operate outside of the law like drug dealers and there would no longer be such a thing as a tax cheat. And best of all MC Hammer would still be spinning records and Wesley Snipes would be making Blade 7.


RE: Long live the king.
By Ringold on 8/3/2012 1:12:29 PM , Rating: 2
Ah, good chap, are you perhaps referring to one of my favorites, the FairTax?


RE: Long live the king.
By Kepler on 8/3/2012 1:44:19 PM , Rating: 2
I can go for that. I've also thought "Why can't we just do 10% sales tax on everything. 5% goes to state, 5% goes to feds". Obviously numbers can be changed, just using 5/5% for easy of digestion.

Fed gov would get 50 states worth of 5%, and have to work with it.

I would totally get behind that.


RE: Long live the king.
By lightfoot on 8/3/2012 2:57:29 PM , Rating: 2
To give you an idea of how high the sales tax would need to be to fund the federal government at current levels, you would need to be thinking of a federal sales tax rate of at least 20-25%

If you add the existing average state and local sales taxes you are then looking at sales taxes of 25-35%

If you excluded food and housing from taxable sales you'd be looking at a much higher tax rate (think ~50%.)

And there are people out there who still insist that the federal government isn't taxing people enough. Sigh.


RE: Long live the king.
By Ringold on 8/3/2012 10:07:35 PM , Rating: 2
While thats true, the rise in price of most things wouldn't have to go up anywhere near that amount as corporate taxes, in all their myriad forms, from direct income taxes to payroll taxes, are embedded in the prices already. So, a national sales tax would go on top of a products price that'd be significantly reduced.

Some products that doesn't apply to, depending on how heavily they were discouraged or subsidized by existing tax code.


RE: Long live the king.
By Kepler on 8/4/2012 8:01:19 AM , Rating: 2
Or the feds can just not spend money like they do? Saying how much sales tax they would "need" is the arguable thing here.

The fed gov needs to shrink. Make them work with 5% sales tax per state, they do work for us (supposedly?).


RE: Long live the king.
By xti on 8/3/2012 1:25:52 PM , Rating: 2
quote:
It's apple themselves who've said they've got more cash then they know what to do with it. Appearantly it's not enough yet.


quote:
The only reason it happens is because if they don't, somebody else will, and since the companies have no morals or values they'll go for whoever offers them the most. It's just wrong. And we're all sheep for accepting it as "the way it is".


has nothing to do with sheep, people have morals, corps have investors.


RE: Long live the king.
By Reclaimer77 on 8/2/2012 11:47:19 PM , Rating: 2
quote:
these property tax breaks should be across the board for all businesses or they shouldn't exist.


Oh but they are! As long as they "go green".
/vomit


RE: Long live the king.
By The Raven on 8/3/2012 12:14:48 PM , Rating: 2
Eww... ... ...did you eat carrots today?


RE: Long live the king.
By integr8d on 8/3/2012 1:26:11 AM , Rating: 2
First of all, not every business can make the claim of being able to invest $1B into the economy. So there's that. Then there's the sweet reality that $1B will go directly into the economy, the majority of which will be used by the people, rather than being chewed up and distorted and siphoned off by the government redistribution machine.

Payroll income tax, employment, high-valued company setting up shop... Nevada made more of a $90M investment than the federal government ever wished they could.


RE: Long live the king.
By apc31981 on 8/3/2012 2:06:19 AM , Rating: 2
We do not have a state (or local) income tax.
35 new jobs (and 200 contracted) is great and all, but this state has some serious budget issues.
Gaming is down in Reno, and used to be the largest source of revenue.


RE: Long live the king.
By Ringold on 8/3/2012 1:21:02 PM , Rating: 2
I agree, and most of that 1 billion wont be local, no matter what Apple claims. It'll be hardware shipped and trucked in from around the world.

I generally don't see a lot wrong with a little tax competition, but server farms seem like one of the worst possible things to fight over. There's just almost no job creation involved.


RE: Long live the king.
By jmunjr on 8/3/2012 2:21:53 AM , Rating: 3
I agree with OP. Why can't I get a tax break if I want to move my business to Nevada? Oh I am not big enough or won't spend enough? So I'm screwed because I don't have the clout that Apple has? Nice, talk about even playing field... the government should have zero impact on the competitiveness within the free market. Period.


RE: Long live the king.
By Kepler on 8/3/2012 9:17:30 AM , Rating: 2
You should get tax breaks. Agreeing with the OP means you don't want tax breaks.

Businesses are taxed, then their employees are taxed -- the government is double dipping in private money. Apple keeps its 100+ billion dollar warchest off-shore because the taxes are so immense that it would be stupid not to.

Tax one or the other, and live with what you get. I bet if the government got rid of the IRS, personal income tax, and just taxed every business 20% of net gains, we'd be far better off. That way, when companies make money and re-invest in themselves, they don't get taxed on that money. Keep sales tax/whatever states/counties do (they need money for infrastructure and stuff).

That, and "middle class" America doesn't have to worry about paying 30%+ tax rates on their 50k per year income.

It would probably end up being a net gain in government revenue, since more people will be buying stuff, businesses will reinvest in themselves/our country, and we wouldn't have to worry about companies keeping billions off-shore.

Keep in mind, this is just some arm-chair economics from a bored guy at work.


RE: Long live the king.
By Kepler on 8/3/2012 9:09:23 AM , Rating: 2
What they need to do is lower taxes enough that Apple (and other companies) don't feel the need to keep all their money off-shore.

The problem isn't giving them tax breaks, the problem is that they don't want to invest/keep money in the US because there are so many taxes, fees, and regulations that it just isn't worth it.


RE: Long live the king.
By bitsnbytes on 8/3/2012 9:35:04 AM , Rating: 2
Taxes are laws. Whatever happened to equal treatment under the law?


RE: Long live the king.
By lightfoot on 8/3/2012 3:12:48 PM , Rating: 2
quote:
Whatever happened to equal treatment under the law?

That's been a joke for quite some time now. Although it is technically illegal to target a single individual or company with a law, Congress has been doing exactly that for a while now. They add so many conditions to a law that it effectively only applies to a single company.

See the "Amazon Tax" or "McDonald's Happy Meal Law"


RE: Long live the king.
By Ammohunt on 8/3/2012 3:22:25 PM , Rating: 2
Long live Clueless College Students! tax incentives are part of Capitalism! this is the one thing the state and cities are in control of its not just the 1 Billion in investment by apple its the billions made from the tax derivatives of having Apple in Nevada from goods and services and who know what else. This is something that is done on a daily basis.


I heard Nevada is an extremely hot and sunny state
By Pirks on 8/2/2012 9:44:20 PM , Rating: 1
So we should expect some BIG solar panel deployments from Apple there in the future. Makes economic sense with amount of heat and sun they get.




By integr8d on 8/3/2012 1:17:22 AM , Rating: 2
Not so sure that heat has anything to do with solar panels making electricity.


By Pirks on 8/3/2012 3:10:46 AM , Rating: 2
If you got lotsa heat in addition to sunlight you can build a huge set of mirrors, make them focus the sun light and heat onto a huge black matte boiler with pressurized water and voila - lotsa very hot steam going into your powerful turbine. I have no idea if that is more economically feasible than traditional silicone panels but it may well be! Also there's no issue with aging silicone panels and the mirrors are dirt cheap compared to those panels. So the whole setup is going to be quite a lot cheaper given powerful enough pressurized boiler, turbine and generator.


By Kepler on 8/3/2012 9:27:57 AM , Rating: 3
AFK, making a giant magnifying glass company.

On second though, maybe I'll just patent "glass/lenses to enhance light flow to particular points", then sue everyone who has light pass through any form of glass/lense!


By Pirks on 8/3/2012 11:20:20 AM , Rating: 2
quote:
making a giant magnifying glass company
No need for any of your fantasies like this one. Just buy a ton of cheapo consumer grade mirrors.


By Kepler on 8/3/2012 11:33:12 AM , Rating: 2
Its all in the marketing! I'll tell people my glass is better because of my brand. Works for Apple!

:P

/flame


By testerguy on 8/3/2012 4:34:48 PM , Rating: 1
I agree there are ways to convert heat into energy, but the one you listed is not solar panels which is probably what they will use.

Domestic solar panels are an example where you would be right, since they directly heat water. Commercial solar panels, on the other hand, are most efficient at lower temps.


By dgingerich on 8/3/2012 10:16:05 AM , Rating: 2
yeah, except a datacenter needs humidity and cooling, both of which are much harder to do in a state like Nevada. It'll cost them twice to three times (depending on the time of the year) the energy to cool a datacenter in Nevada.


By apc31981 on 8/3/2012 3:23:49 PM , Rating: 2
In LV, yes, but not in Reno.
The temps here are pretty mild (considering I moved from Phoenix a year ago and Minneapolis 8 years ago).
I would be shocked if they don't use some sort of geothermal. The casino I got married in (Peppermill) is completely powered by geothermal energy.
Today it is in the 90's, about 10% humidity. Coldest it got last winter was ~ 20.


BAD DEAL
By toyotabedzrock on 8/3/2012 8:51:29 PM , Rating: 2
35 long term jobs huh?
35 x $60,000 x 10 years = $21 Million




"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates











botimage
Copyright 2013 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki