“Yet, with a handful of employees in a small office here in Reno, Apple has done something central to its corporate strategy: it has avoided millions of dollars in taxes in California and 20 other states,” Duhigg and Kocieniewski report. “Apple’s headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company’s profits, Apple sidesteps state income taxes on some of those gains.”
Duhigg and Kocieniewski report, “California’s corporate tax rate is 8.84 percent. Nevada’s? Zero… Setting up an office in Reno is just one of many legal methods Apple uses to reduce its worldwide tax bill by billions of dollars each year. As it has in Nevada, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands — some little more than a letterbox or an anonymous office — that help cut the taxes it pays around the world. Almost every major corporation tries to minimize its taxes, of course. For Apple, the savings are especially alluring because the company’s profits are so high.”
“Without such tactics, Apple’s federal tax bill in the United States most likely would have been $2.4 billion higher last year, according to a recent study by a former Treasury Department economist, Martin A. Sullivan,” Duhigg and Kocieniewski report. “As it stands, the company paid cash taxes of $3.3 billion around the world on its reported profits of $34.2 billion last year, a tax rate of 9.8 percent. (Apple does not disclose what portion of those payments was in the United States, or what portion is assigned to previous or future years.)”
Read more in the full article here.
MacDailyNews Take: It’s legal. If you don’t like it, elect people who agree with you and change the laws.
Apple is “especially alluring” to The New York Times because The New York Times‘ circulation continues to drop and they desperately need to attract as many eyeballs as possible. That is why they put “Apple” in their headlines and then bury pesky facts like “every major corporation tries to minimize its taxes, of course” within the bowels of their yellow journalism.
So, to recap: “Every major corporation tries to minimize its taxes, of course.” Maximizing profit is every publicly-traded company’s fiduciary duty to their shareholders. Tax avoidance is not tax evasion. What Apple is doing is perfectly legal. If you don’t like the current tax laws, elect people who agree with you and change the laws.