Apple Expressing Frustration as Tax Incentives for Austin Expansion Remain in Limbo

[MacRumors]

Last month, the State of Texas announced that Apple would be making a major expansion of its existing customer support and administrative campus in Austin, investing over $300 million to add 3,600 workers at the site. The move would more than double Apple's workforce in Austin.




Over the past several weeks, a number of governmental agencies, including the State of Texas, Travis County, and the City of Austin have been working on tax break packages designed to secure Apple's commitment to bring the new jobs to Austin. While most of the incentive packages have been approved, the Austin American-Statesman reports that delays in work by Travis County are leaving Apple "frustrated" and the deal "in peril".

Dave Porter, senior vice president for economic development at the Greater Austin Chamber of Commerce, said Thursday that Apple's plans to bring its Americas operations center to Austin are up in the air because of the county's continuing deliberations and calls for new conditions on its incentives deal with the company.

"This deal is not done. It remains in peril. And Apple is frustrated," Porter said.

Travis County had been expected to offer tax breaks of $5.4-6.4 million as part of the overall incentive package of $35-36 million over 10-15 years, and while Travis County had given initial approval to its portion of the deal earlier this month, it has yet to be finalized.

The delays are related to objections raised by the opponents of the deal, who have claimed that the terms of the deal are too favorable for Apple and could see the company avoid penalties should it fail to meet some of the contract's terms.

Apple had been said to also be considering Phoenix, Arizona as a potential location for its new facilities, and while it seems likely that the company would much prefer to locate the new facility at its existing campus in Austin, it is likely continuing to weigh its options until a final deal for the Austin site is signed.

Article Link: Apple Expressing Frustration as Tax Incentives for Austin Expansion Remain in Limbo

[Ingot]

Wow. They will go to Phoenix. Too bad for Texas.

[spiney]

Why give tax breaks to the most profitable corporations in the world? The local authorities have to provide infrastructure, etc., and get no revenue?

[polbit]

Yes, let's give Apple tax breaks, they really need them.

[lee14160]

Why is it that some people just don't get it. You have to break an egg to get an. . .

[G5isAlive]

why is this news?

[centauratlas]

Exactly. It is competition which is healthy for everyone. You can compete to have someone bring jobs to your area or not and lose it all.

It is just the greedy, power-hungry politicians in Travis County who think they can squeeze something out of Apple.

Originally Posted by Ingot

Wow. They will go to Phoenix. Too bad for Texas.

[lee14160]

Originally Posted by polbit

Yes, let's give Apple tax breaks, they really need them.

It's not the tax break it is the work. 3200 jobs is important to the people living in Austin. Get over the hate for Apple.

[guzhogi]

I honestly wonder why Apple wants/needs the tax breaks? Since I'm not privy to all the information, I'll reserve judgement.

[Kyrra]

This sounds like standard negotiations to me. Both sides what a deal that is favorable to them, but the customer (Apple) can go else-where to build their campus, so they are threatening to use a different supplier (of land).

----------

Originally Posted by guzhogi

I honestly wonder why Apple wants/needs the tax breaks? Since I'm not privy to all the information, I'll reserve judgement.

Because they are saying "We will create thousands of jobs in your city". "After the tax breaks go away, you'll get lots of money from us."

[gotluck]

Texas is in a better economic position than much of the US right now. Maybe they don't need to bend over for Apple?

[applesith]

Not giving the breaks, then Apple should go somewhere else and take those jobs with them. Hate all you want. Apple can expand because of all the money it makes.

[bad03xtreme]

Money talks, bull$#$+ walks...

[Bluesdealer]

It is supposedly the "second Silicon Valley," but the leadership is so left, they tend to make poor economic decisions. Driving Apple away is not an intelligent move.

[DubOverdose]

Originally Posted by spiney

Why give tax breaks to the most profitable corporations in the world? The local authorities have to provide infrastructure, etc., and get no revenue?

Apple will locate its offices where it is best to strategically, and that includes keeping an eye on associated costs. If building in Austin is more expensive (and thus less advantageous), then Apple will go elsewhere. If Austin wants a major employer to stay there and grow, then they will offer Apple some incentives. Make no doubt, it is beneficial for Austin to have that many more jobs in the area with all those added workers spending money in the area.

And being a profitable company does not mean that the company should be dicked around with. It is a profitable company because it is extremely well run and is a company you'd want in your city.

[goodcow]

Originally Posted by centauratlas

Exactly. It is competition which is healthy for everyone. You can compete to have someone bring jobs to your area or not and lose it all.

It is just the greedy, power-hungry politicians in Travis County who think they can squeeze something out of Apple.

More like Apple is trying to squeeze something out of Travis County. Travis County is providing city services and infrastructure, paid for with taxes. It's absurd that we have any sort of corporate welfare like this, especially for companies with the cash reserves Apple has. How you can defend this is beyond me.

[boyd1955]

They don't need any tax breaks ... And why should they get any ... What a joke ... They need to keep this sort of stuff quiet or they'll be loosing sales ... And quite frankly its what used to be called corruption

[Small White Car]

Originally Posted by spiney

Why give tax breaks to the most profitable corporations in the world? The local authorities have to provide infrastructure, etc., and get no revenue?

Originally Posted by boyd1955

They don't need any tax breaks ... And why should they get any ... What a joke ...

3,600 people paying income tax and sales tax and homeowner taxes and car taxes provides lots of revenue.

It's up to Texas and Arizona to fight over that revenue.

What do you suggest? If you're on that city council you'd say "yeah, sure. Go send all that money to Arizona. We don't need it"? (Not to mention that your unemployment rate is worse since there are 3,600 fewer jobs than there otherwise would have been.)

That's not a move that will get you reelected.

Originally Posted by goodcow

How you can defend this is beyond me.

Then give us a solution. What should that city council do?

[goodcow]

Originally Posted by Small White Car

Then give us a solution. What should that city council do?

Given the current situation, where they apparently do have to fight with Arizona over tax subsidies, is what is indefensible and no, I don't have a short term solution. The real solution would be to ban tax breaks, subsidies and corporate welfare nation wide for publicly traded companies.

[BJMRamage]

happens ALL the time all over America.

States think they can ditch the company tax breaks on certain businesses and boom, they move across the border.
Happened in my state.

[tonytiger13]

We live in a capitalistic country. Corporations are going to find any way they can to save/make money. Even the nicest, most sincere, least greedy politicians were raised to love money. I just wish corporations still acted like citizens of a nation instead of a government in their own right. Apple or anyone that does business elsewhere too seem to have a mindset that they're no longer Americans and are not patriotic enough to pay taxes (only b/c they try to get out of any tax they can). But they have the right to do that.

[Small White Car]

Originally Posted by goodcow

The real solution would be to ban tax breaks, subsidies and corporate welfare nation wide for publicly traded companies.

What?

You want to make it illegal for governments to set the tax rates? So who would decide how much they're supposed to pay?

[gotluck]

Originally Posted by Small White Car

What?

You want to make it illegal for governments to set the tax rates? So who would decide how much they're supposed to pay?

flat tax baby

[tekno]

Originally Posted by spiney

Why give tax breaks to the most profitable corporations in the world? The local authorities have to provide infrastructure, etc., and get no revenue?

They're a business. They want to make money not hand it to the taxman. And any sensible businessman keeps in mind that their financial situation could change very quickly (and judging by the fact that Apple have been churning out the same products for a few years now, that time may come sooner than everyone realises).

[JHankwitz]

Originally Posted by spiney

Why give tax breaks to the most profitable corporations in the world? The local authorities have to provide infrastructure, etc., and get no revenue?

A 'tax break' is a far cry from 'no revenue'.