A report recently released says Apple, Inc. is avoiding paying billions of dollars of global taxes. The report claims the tech giant is opening small offices across the globe to collect and then invest profits by the company.
The report that was released by theon Saturday said an office in Nevada, where corporate taxes are zero, was just one of many the tech giant, based in California uses to sidestep income taxes on profits. Corporate tax rates in California are 8.84%.
Sales of iPads and iPhones of record proportions saw Apple report $39.3 billion in profits last week, for just the first quarter of 2012.
The article quoted executives from Apple who said offices in Luxembourg, the Netherlands, the British Virgin Islands, Ireland and other places that offer low tax rates were part of the legal methods the business was using to help lower its worldwide tax payments.
The report alleges that Apple used corporate strategies they devised to take advantage of the tax code. The report cites ex-executives of the tech giant who allegedly helped craft the policies and strategies.
In the office in Reno, Nevada, a subsidiary was opened to invest and manage the money for Apple and when the investments were successful, the zero corporate rates for the state shelters any profits from being taxed.
Apple said in a statement that it has conducted its entire business with the highest ethical standards and complied with all laws and applicable accounting rules.
The states should impose a minimum corporate tax against companies like Apple that have gotten too clever for our own good. If Apple does business in the United States, then it should pay a minimum state tax that will be shared by all the states where it actually does business. And if Nevada does not want the tax, its share should go to the states that do. Either way, the company must pay an overall state minimum tax. This should discourage the bogus operation centers now set up in places like Reno.
And if Apple decides to pack up and move altogether to Ireland, the Netherlands, or wherever, the states should deem such move an effort to skirt state tax laws — and should impose stiff penalties.
Since a corporate minimum tax is not a new idea in federal taxation, states should find a way to implement it as well.