Apple is set to do a deal with its corporate home town, Cupertino, California, that will see the supplier pick up a massive tax rebate simply by shifting its sales and marketing into the area.
If the company moves its sales offices into Cupertino from their current locations around California, point of sales taxes will have to be paid to the city's revenue collection authorities. This could be worth at least $1 million a year, even with the parlous state of Apple's sales, and the total would probably skyrocket if the company bases its electronic commerce business in the area too. This would make Apple the city's largest sales tax contributor.
In return for bringing the new revenue to Cupertino, Apple will pick up a welcome cash bonus by getting a quarter of the total sales tax back in the form of a theoretical tax rebate. In practice, Apple would not begin paying tax until it racked up enough business to pay $250,000 in new sales tax. Sales tax above $1 million would be split 50:50.
The deal - which would run for an initial five years - was expected to be put through on the nod at a meeting of the city council on Monday evening. At present there are no Apple sales offices in the city, but the council expects that the tax break will make Apple Cupertino?s single biggest sales tax contributor.
The losers in all this are neighbouring California cities San Francisco and Sacramento, where Apple has already closed down its sales offices, and Irvine, where operations have been scaled down as part of the company?s ongoing restructuring and redundancy initiatives.
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