Apple to Invest Over $1 Billion in Downtown Reno as Part of Plan to Reduce Taxes
Not too long ago, we shared a story detailing how Apple avoids paying billions in taxes. One such example can be seen in Braeburn Capital, which is really an Apple subsidiary that manages and invests the company's vast fortune. The company is located in Reno because corporate tax rates in Nevada is 0%.
Recently, Apple has announced a 10-year US$1 billion investment plan which will see it open a data center in downtown Reno along with a business and purchasing center.
The deal includes $89 million tax abatements from the city, county and state over the next decade, effectively reducing the company’s tax burden by 79 percent, according to an analysis of the project by Phoenix-based Applied Economics. About 82 percent of those tax breaks will come from local governments and the rest from the state.
Those tax breaks include a reduction on 85 percent of the personal property tax for 10 to 30 years. If all local governments approve the deal today and tomorrow — including the Washoe County School District and the Reno City Council — Apple’s effective sales tax rate will be less than 1 percent.
In all, local and state governments would collect about $16 million in tax revenue from Apple over the next 10 years.
Considering Apple is expected to generate in excess of US$40 billion in revenue this year, $16 million really does look like loose change.
Although Apple does stand to benefit from major tax breaks, the plan will also see the creation of 41 full-time jobs at the data center along with 200 contract employees. Construction work on the new facilities is also expected to generate close to 600 construction jobs. All in all, Apple's investment plan will also bring about a significant economic boost to the region.