Report: Apple legally avoids billions in taxes

CBS

(AP) NEW YORK - A published report says Apple Inc. uses subsidiaries in Ireland, the Netherlands and other low-tax nations as part of a strategy that enables the technology giant to cut its global tax bill by billions of dollars every year.

The New York Times on Sunday outlined legal methods used by Cupertino, Calif.-based Apple to avoid paying billions of dollars in federal and state taxes.

One approach highlighted in the report: Even though the company is based in California, Apple has set up a small office in Reno, Nev. to collect and invest its profits. The corporate tax rate in Nevada is zero. In California, it's 8.84 percent.

While many major corporations try to reduce their tax bills, technology companies like Apple, Google Inc., Microsoft Corp. and others have more options to do so.

That's because some of their revenue comes from digital products or royalties on patents, which makes it easier for them to move profits to tax-friendly states or countries, the Times said.

In contrast, it's tougher to shift the collection of profits from the sale of a physical product — like groceries or a car — to a tax-friendly haven.

The 71 technology companies in the S&P 500, including Apple, Google, Yahoo Inc. and Dell Inc., reported paying global cash taxes over the past two years at a rate that's, on average, one-third less than other S&P 500 companies, the Times said.

Apple has legally allocated about 70 percent of its profits overseas, where tax rates are often much lower than in the U.S., according to company filings.

The Times cites a study by former Treasury Department economist Martin A. Sullivan that estimates Apple's federal tax bill would have been $2.4 billion higher last year without such tactics.

The newspaper says Apple paid $3.3 billion in cash taxes globally on $34.2 billion in profits last year. That's a tax rate of 9.8 percent.

In a statement, Apple told the Times that it has complied with all laws and accounting rules, and says that its U.S. operations generated nearly $5 billion in federal and state income taxes in the first half of fiscal 2012.

Wall Street analysts predict Apple could earn up to $46.9 billion in its current fiscal year, according to FactSet.

[Dmorris_Engage_America]

Whether you believe that the corporate tax code is problematic because its rates are too high or you think its problematic because some businesses pay low effective rates doesn't matter. What matters is that our corporate tax code is woefully out-of-date and must be overhauled.

With Bowles-Simpson type reform, the U.S. would move to a territorial tax system and Congress can simplify the tax code, improve corporate competitiveness, and spur economic growth. http://******/noTDPF

[sjc_1]

If the Fortune 1000 companies each paid the $1 billion more they owe every year, that would cover the deficit, but we allow them to tax dodge.

Corporations used to pay 40% of the federal budget in the 1960s, now they pay 6%. We have allowed them to dodge taxes because they claim to create jobs, while they outsource jobs every day.

[thechooch1]

sjc_1 you are right on. Additionally, who do people think pick up the lost taxes (revenue)? It is us! Also Corporations are international, not national, they could care less about American workers or America for that matter.

[Osprey4]

Unlike nearly 50% of the American public, they actually paid income tax. Don't see any articles about those freeloaders, do you?

[endrepubs]

So Osprey, would you like to trade places with the Americans who don't earn enough to pay income taxes? Really? Is that your envy.....to make so little money, you pay no "income" taxes?

[credibility2]

endrepubs, maybe these types had enough deductions to net zero their tax liability...not all those who end up not paying taxes earn an insufficient amount to warrant paying taxes...individuals are given many deductions to take and it's up to them to take the legally provided ones...no different than corporations or small businesses...

[occupy_cbs]

Smokey75: "Apples profits make "Big Oil" profits seem like pocket change"



Aaaah smoker, more of that republican FUZZY MATH?

Apple -- $46.9 billion in predicted profits

BIG OIL -- $137 billion in 2011 profits from just the 5 largest

-----

Not to mention the reasoning behind the Keystone pipeline by people like speaker boner that aim to benefit from vast investments in BIG OIL, since it's companies like Valero OIL that will be refining that imported Canadian tar sands bitumen in products like diesel, and EXPORTING it TAX FREE so the American taxpayers get absolutely no benefits of help with the deficits or national debt!

[occupy_cbs]

Smokey75: "Serious a $499 Ipad cost apple about $80 dollars to manufacture"



What? Are the conservitard republicans hating CAPITALISM today?

BTW, did you know that land-based BIG OIL companies spend about $2 to get a barrel of $100 OIL, and while offshore, deep-well drilling can cost upwards of $30/barrel, back in 2008 when OIL was $150/barrel, even that was 5-times the price, but that $2/barrel OIL was 75-times the price.

Nice inflated profits by BIG OIL and their OIL speculators!

[occupy_cbs]

Smokey75: "Apples profits make "Big Oil" profits seem like pocket change"



Cry me a river for BIG OIL....

Even if Wall Street analysts are correct in predicting Apple could earn up to $46.9 billion in its current fiscal year, BIG OIL had a record-high year of $137 billion profits in 2011.

YOU do the math (and not bush's fuzzy math) to see if $46.9 billion is larger than $137 billion!

BTW, that $137 billion in profits, is only by the 5 largest BIG OIL companies in 2011 -- $26 billion by BP; $27 billion by Chevron; $12 billion by Conoco-Philips; $41 billion by Exxon-Mobil; and $31 billion by Shell -- for a total of $137 billion in 2011 profits!


Not to mention that Big Oil has benefited from 100 years of consistent tax breaks too!

[occupy_cbs]

Hoax-and-Chains: "Compare the profits of Apple to the minis-cule profits to the big bad oil companies and it is truly laughable."



What's truly laughable, is your republican FUZZY MATH comparing $46.9 billion to $137+ billion -- try a remedial math course!

[starving1968-3]

by buckyjo April 30, 2012 8:14 AM EDT
If it's legal I'm fine with that. Should they volunteer to pay more in taxes?

Those who feel that taxes should be increased should themselves donate more of their income to the IRS. There should be a 'Donate Section' on tax forms.






If they can "volunteer" to pay more taxes to get up to the percentage that I pay in taxes, then shouldn't I have the option to "volunteer" to pay less, to get down to where they are?

[dman6015]

Never a defender of the evil that corporations do in the name of profit, but if it's legal, then what are they "avoiding"? So California is upset because a corporation based there is using their next door neighbor's tax laws to their advantage. They need to get the laws changed. This is similar to the Federal government complaining about multinational corporations hiding their assets in other countries. Why aren't they changing the laws? Simple, they don't want to drive the corporations completely out of the U.S.

[honestabe8]

Tax avoidance is legal

[occupy_cbs]

Smokey75: "Apples profits make "Big Oil" profits seem like pocket change"



Surely you jest and really need to educate yourself from the constant fox/rush propaganda you post!

The most profitable industry known to mankind has been BIG OIL, and Apple profits pale in comparison!

The five largest U.S. BIG OIL companies made in excess of $1 Trillion in PROFITS over the past decade (2001-2010), and are on line to beat that in the next decade by hundreds of billions!

[occupy_cbs]

MalloryDavis: "Ok, so APPLE and other companies are not paying their taxes...now CONGRESS wants to up the low-interest student loans...oh how we love the way the effing government takes and favors the BIG CORPORATES.

When will there be an uprising."




Exactly! "When will there be an uprising"?

Multi-national corporations are sitting on piles of MONEY both here and abroad, due to this global economy that is benefiting them and these ridiculous tax loopholes and tax havens allowing them to pay little or no taxes.

They are not paying anything close to the 35% corporate rate, and many of them are even getting IRS rebates on billions in US profits!

This is a severely broken system and needs to be fixed for America.

It's the small businesses that need the breaks today, and should be paid for by removing tax loopholes and tax havens on corporations!