North Carolina lawmakers are pushing to give Apple Inc. a multi-million dollar tax break should the company bring an East Coast computer server farm to the state – an estimated $1 billion investment, according to a state official with knowledge of the recruitment efforts…
While it has been known that North Carolina lawmakers were working on changing tax rules to benefit one company, the name of the outfit has been kept secret.
The House Finance Committee on Thursday altered the proposed tax change so companies could qualify only if they locate in one of North Carolina’s poorest counties, provide health insurance, meet a wage standard, and forego other state grants or tax breaks…The tax breaks could be worth about $46 million in the next decade, assuming the company reaches its $1 billion investment target within nine years of starting, according to a memo by legislative fiscal staffers that does not identify the company. The memo said no current company meets the criteria to receive the tax break and the Commerce Department knows of just one with the potential to qualify.
“It’s very specific to this project,” Luebke said of the tax breaks.
The conditions adopted Thursday, if approved by both legislative chambers and the governor, would push the project from the state’s urbanized corridor connecting Raleigh to Greensboro and Charlotte. In 2007, Google Inc. committed to spending $600 million for a server farm near Lenoir in the western North Carolina foothills. It opened last year…
My, oh my. Apple’s existing server facilities do a truly crappy and underpowered job at handling the traffic they already have. But, this sounds like a Google-level facility.
Whatever do they have in mind?
UPDATE: NC state legislature debated less than a minute – and approved the package.
One word:
SKYNET
Apple’s new motto: We aim to serve.
RE: Jägermeister said, on May 24th, 2009 at 10:34 am
#17 – qb – Around 13.7 million people are out of work in the US
Thank Bush for that.
Sorry, Jagermeister, that really isn’t true. But if it helps you in your world to blame Bush for everything then I think he is a big man and able to slough off your slams.
Georg and others. My rather feeble point was that companies like Apple and Microsoft do employ hundreds of H1B visa applicants each year. This is not going to dent the real unemployment figures. Secondly, Apple has <2% of their employees as H1B which means that 98% of these new jobs in NC will go to Americans.
Not to mention a 1 Billion dollar complex may create a few construction jobs. And no matter where the employees come from they still pay income and property tax, shop, eat at restaurants and buy houses.
As a resident of one of the two counties mentioned in the article, this really intrigues me. But I wonder why they are so sure it is Apple? Both counties mentioned (Catawba and Cleveland) are neighbors to the Charlotte metro region. I wonder if the hint that it is for Apple is a red herring.
“The tax changes would affect the way corporate income taxes are calculated by giving breaks to companies with a relatively small share of U.S. sales in North Carolina but which have large shares of their nationwide property and payroll in the state.”
I do not know of any Apple related mfg or distribution facilities in the state and there are only four Apple stores in the state. So how would this tax break benefit Apple? Maybe it is really meant for Bank of America or Wachovia (sorry, should have said Wells Fargo), or IBM or SAS. Pure guess on my part.
Speaking as a resident of NC…
#10 – 10% of something is better than 100% of nothing. Not to mention the fact that the county benefits by more tax revenue from the higher-paid employees going into the area’s resources, including schools, roads, EMS, etc.
#20 – RTP already foots a lot of the bill here in NC.
More higher-skill jobs in the county is a win-win for both the county and the state. I don’t care who it is, but it’s worth it.
Maybe Apple is just sick of doing business in a liberal pinko state that does nothing to help its corporations. No wonder they’re leaving, while california implodes…and no wonderthey didn’t come to NY, or NJ either…NC seems to know how to treat our gems right, take a note california, ny, and nj…this is how business should be done.
The NC Apple facility is a crash program to create a self-aware entity to take over control of Apple should Steve Jobs elect not or is unable to return.
The project has the codename “iSteve” and has been in development under the direction rSteve (realSteve) for several years. iSteve will be virtually indistinguishable from rSteve on a computer monitor. It is rumored that in the future a cyboid will be created that can function in real space.
Hey! This is a surprise Steve Jobs is coming up the walk to my door.
omg RUNRUN tha isTeves are coming! The iSteves are he
“In 2007, Google Inc. committed to spending $600 million for a server farm near Lenoir in the western North Carolina foothills. It opened last year…”
“Google’s big NC data center (~$600 million) is in Lenoir (I think) which is in the less developed west counties, provides about 250 direct jobs, and probably another 400 indirect jobs. The big win is that the state and local counties get >$30 million in tax revenue per year over 10-15 years.”
I’m actually on the Lenoir City Council, and was involved in the Google negotiations. I was the only local elected official to vote against the crazy corporate handouts they got locally. I’m also, not coincidentally, one of the few Libertarians elected to office in the state.
It’s true we’re getting more in taxes on the land than before, However, the theory behind property taxes is that if your property is worth more, you use more in public services and should pay more. Google came to Lenoir for cheap land, lots of available water and power (furniture has gone overseas in the last decade, leaving lots of excess power substations), and cheap, available labor. Also, the economic slowdown has slowed their business. They haven’t come close to meeting their announced job goals. Which doesn’t matter for their local tax breaks, since our agreement didn’t require them to meet any goals whatsoever.
If this is the road government is going down, it should be honest and eliminate corporate taxation entirely. This pick-and-choose process ends up benefiting large multi-nationals while screwing over local small businesses and taxpayers.
It’s amazing how many people are always so ready to display their ignorance and biases on the web. This thread consists almost entirely of snarky responses from Apple haters and liberal haters. (Granted, it’s a reach to drag liberals into an Apple facility in the hills of western North Carolina, but it seems righties consider a world in which any taxes exist as “pinko commie.”
This is not rocket science. Apple wants a big new server farm because they need a lot more space to serve stuff. What might that be? Well, it just might be music and video.
Why is that a surprise? If MS was doing this, you’d all be yawning.
As for the tax break angle: That’s a debatable topic. It doesn’t bother me, but legitimate differences exist. It’s safe to say that no one is going to stand up large facilities with many jobs in rural North Carolina unless something entices them other than the scenery.
This is an easy one…..
The new Apple Server Farm is a content delivery system aiming to allow games and movie rentals straight to your iPhone. Or so I hear from the Apple-vine.
SKL
If it were a commodity PC server farm it would only cost $500 million but the price of aluminum and Apple logo’s double the cost.
/ducks
#42 TJ
That’s an eye opening post.
According to an article on Open.Salon.com, the new iPhone2 might have over-the-air TV and movie downloads. I don’t know if this is enough to justify this server farm, however.
http://tinyurl.com/olkttt
Apple has massive infrastructure investments in CA. But this state has the highest taxes in the nation. This is why job losses and economic downturn is hitting CA worse than the rest of the states. Smart businesses have been leaving this state for years.
Why should Apple not look elsewhere for investing their cash? CA could have had that construction and those full time jobs. But they, like many of the idiot posts that I have read hear, people just don’t get it. Higher taxes reduce jobs and lower taxes or tax breaks increase jobs.
“crappy and underpowered”?
WTF are you smoking, Dvorak? I can count the outages on the iTMS since its launch on one hand. They’re the biggest music retailer in the world, and they’ve delivered billions of downloads.
The more Apple succeeds, the more envy we will hear from those
still tied to their PC boat anchors. What else is new?
Sunny Guy