By putting an office in Nevada, where there is a zero percent corporate tax rate, Apple avoids paying the millions of dollars in taxes that would be levied in California, the home of its headquarters.
The company is set to make $41.4 billion this year, which would mean lots of revenue for the various countries where it does business if it didn’t exploit tax loopholes.
Without such loopholes, Apple’s U.S. federal tax bill would have been $2.4 billion higher last year, according to Treasury Department economist Martin A. Sullivan. In total, the company paid $3.3 billion in international taxes on profits of $34.2 billion. Wal-Mart paid $5.9 billion on profits of $24.4 billion.
Read The New York Times’ detailed report to get the story in full. —ARK
The New York Times:
Setting up an office in Reno is just one of many legal methods Apple uses to reduce its worldwide tax bill by billions of dollars each year. As it has in Nevada, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands — some little more than a letterbox or an anonymous office — that help cut the taxes it pays around the world.
Almost every major corporation tries to minimize its taxes, of course. For Apple, the savings are especially alluring because the company’s profits are so high. Wall Street analysts predict Apple could earn up to $41.4 billion in its current fiscal year — which would be a record for any American business.