Apple has agreed to increase the amount of taxes it pays to the city of Cupertino, Calif., as part of a development agreement expected to receive final approval Tuesday night.
The increase is actually a reduction in the size of a sales tax rebate the city gives to Apple each year.
Through last year, the city of Cupertino refunded about 50% of the sales taxes it received from Apple-related purchases back to the company. Going forward, the city will only refund 35% of those sales taxes, according to terms of the new agreement.
"This item was one of many negotiated between Apple and the city of Cupertino as part of the development agreement," said Cupertino Mayor Orrin Mahoney in an email. "The Apple 2 campus is expected to have long-term impacts on the city with respect to traffic and other issues and Apple agreed to a financial offset for some of those impacts."
The city council gave its formal approval to the project last month. However, a second technical vote is scheduled for Tuesday night to make that decision official. The vote is considered a formality, and approval is widely expected.
The lower rebate likely won't put a dent in Apple's earnings statements. But it could make a big difference to the Cupertino city budget, though just by how much won't be known for several years.
According to an economic development report released this summer by Apple, sales by the company generated $12.7 million in sales tax for Cupertino in 2012. Under the terms of old rebate agreement, Cupertino gave $6.2 million of that back to Apple.
Source : latimes.com
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