Apple heads for home in tax deal

Apple is set to shift its sales and marketing teams to its home city of Cupertino, California, in a deal that will see the manufacturer pick up a massive tax rebate.

If the company moves its sales offices to Cupertino from their current locations around California, it will have to pay point-of-sales taxes to the city?s revenue collection authorities.

Tax due could amount to at least $1 million a year, even given the parlous state of Apple?s sales, and the total could skyrocket if the company decides to base its electronic commerce business in the area as well.

But in return for bringing the additional revenue to Cupertino, Apple would pick up a welcome cash bonus ? it would receive a quarter of the total sales tax back in the form of a theoretical rebate. In practice, the company would not begin paying tax until it racked up enough business to pay $250,000 in new sales tax. Sales tax above $1 million would be split 50:50.

The deal ? which would initially run for five years ? was expected to be approved at a meeting of Cupertino City Council on 12 May.

At present there are no Apple sales offices in the city, but the council expects that the tax break will result in the company becoming Cupertino?s single biggest sales tax contributor.

The manufacturer has already closed its sales offices in the neighbouring Californian cities of San Francisco and Sacramento, and operations in Irvine have been scaled down as part of the company?s ongoing restructuring and redundancy initiatives.

A further decision about Irvine will be taken shortly.