California wants a piece of Cupertino’s Apple pie, making a bid for some of the tax revenue the city enjoys.
Apple has a tax deal with Cupertino wherein all online sales in the state of California are credited as taking place in Cupertino. As a result, the city enjoys a disproportionately large share of tax revenue, although it does return approximately one-third of it to the company in incentives, according to AppleInsider. The California Department of Tax and Fee Administration (CDTFA) is keen to change Cupertino’s arrangement with Apple and funnel more of the tax revenue to the rest of the state.
“The CDTFA has done an audit of one of our big taxpayers and has identified that there are dollars being allocated improperly,” Cupertino Assistant City Manager Matt Morley told told San José Spotlight, “and through that audit they are asking for that process to be corrected.”
“The city obviously isn’t happy with this and we don’t believe the CDTFA is on base,” continued Morley.
If Cupertino is unsuccessful in appealing, it stands to lose $60 million per year in revenue, a loss that will likely result in increased taxes, layoffs, and other cost-saving measures.