Some estimates predict the company could bring back as much as $245 Billion in overseas cash.
- Apple on Wednesday announced plans to open a new campus in the United States and said it would hire 20,000 new employees over the next five years.
- It also said it plans to pay $38 billion in repatriation Tax. CNBC estimated that with the new repatriation tax rate of 15.5%, that means the company would bring nearly all its overseas cash, or about $245 billion, back to the United States.
The company said in a statement that it would “establish an Apple campus in a new location,” which it would announce “later in the year,” that “will initially house technical support for customers.”
Apple declined to give more information on the location of the new campus.
Apple says it is building a separate new facility in Reno, Nevada.
Apple also says it will make a “direct contribution” of more than $350 billion to the US economy over the next five years through making new investments and purchasing materials from American companies. Apple said it estimates it will spend $55 billion this year with American suppliers and manufacturers, with payments to over 9,000 companies.
Apple is bringing a lot of money home
Apple said in the announcement that expects a tax bill of about $38 billion in repatriation tax payments because of changes from the new tax law.
With the new repatriation tax rate of 15.5%, that means Apple would repatriate $245 billion, or nearly all of its overseas cash, CNBC estimated. Apple declined to comment on CNBC’s math.
Apple invests and purchases parts from American companies with its Advanced Manufacturing Fund, which has given money to Finisar, a laser company, and Corning, which makes the hardened glass that iPhones use.
Apple said on Wednesday that its fund had increased to $5 billion from $1 billion.
The Trump effect
One of President Trump’s top priorities is striking deals with American companies so he can claim that his administration is saving or creating American jobs.
Apple does most of its manufacturing in Asia, so it’s become a target for Trump, who has blamed the company for the long-running trend of manufacturing moving overseas, and who has encouraged Apple to build factories in the US.
That’s why Apple makes such a big deal about it supporting American manufacturing and the fact that many of the companies that supply parts for the iPhone and other Apple products have factories in the US.
Apple reportedly has asked its big Asian manufacturing partners, like Foxconn, into looking into building Apple products domestically.
Cook was one of several elite technology CEOs who met with Trump in December 2016.
The full announcement, below, is also on Apple’s website: Apple accelerates US investment and job creation
$350 Billion Contribution to US Economy Over Next Five Years
Cupertino, California — Apple today announced a new set of investments to build on its commitment to support the American economy and its workforce, concentrated in three areas where Apple has had the greatest impact on job creation: direct employment by Apple, spending and investment with Apple’s domestic suppliers and manufacturers, and fueling the fast-growing app economy which Apple created with iPhone and the App Store. Apple is already responsible for creating and supporting over 2 million jobs across the United States and expects to generate even more jobs as a result of the initiatives being announced today.
Combining new investments and Apple’s current pace of spending with domestic suppliers and manufacturers — an estimated $55 billion for 2018 — Apple’s direct contribution to the US economy will be more than $350 billion over the next five years, not including Apple’s ongoing tax payments, the tax revenues generated from employees’ wages and the sale of Apple products.
Planned capital expenditures in the US, investments in American manufacturing over five years and a record tax payment upon repatriation of overseas profits will account for approximately $75 billion of Apple’s direct contribution.
“Apple is a success story that could only have happened in America, and we are proud to build on our long history of support for the US economy,” said Tim Cook, Apple’s CEO. “We believe deeply in the power of American ingenuity, and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness. We have a deep sense of responsibility to give back to our country and the people who help make our success possible.”
Apple, already the largest US taxpayer, anticipates repatriation tax payments of approximately $38 billion as required by recent changes to the tax law. A payment of that size would likely be the largest of its kind ever made.
Growing Apple’s US Operations
Apple expects to invest over $30 billion in capital expenditures in the US over the next five years and create over 20,000 new jobs through hiring at existing campuses and opening a new one. Apple already employs 84,000 people in all 50 states.
The company plans to establish an Apple campus in a new location, which will initially house technical support for customers. The location of this new facility will be announced later in the year.
Over $10 billion of Apple’s expanded capital expenditures will be investments in data centers across the US. Over the last decade, Apple has invested billions of dollars in data centers and co-located facilities in seven US states, including North Carolina, Oregon, Nevada, Arizona and a recently announced project in Iowa.
Today, Apple is breaking ground on a new facility in downtown Reno, which will support its existing Nevada facilities.
All of Apple’s US facilities, including offices, retail stores and data centers, are powered by 100 percent renewable energy sources like solar, wind and micro-hydro power, which Apple generates or purchases from local projects. The new campus announced today will also be powered entirely by green energy.
Investing in Apple’s Domestic Suppliers and Manufacturing Partners
Building on the initial success of the Advanced Manufacturing Fund announced last spring, Apple is increasing the size of the fund from $1 billion to $5 billion. The fund was established to support innovation among American manufacturers and help others establish a presence in the US. It is already backing projects with leading manufacturers in Kentucky and rural Texas.
Apple works with over 9,000 American suppliers — large and small businesses in all 50 states — and each of Apple’s core products relies on parts or materials made in the US or provided by US-based suppliers.
Preparing Students for the App Economy
Apple, which has a 40-year history in education, also plans to accelerate its efforts across the US in support of coding education as well as programs focused on Science, Technology, Engineering, Arts and Math (STEAM).
The iOS app economy has created more than 1.6 million jobs in the US and generated $5 billion in revenue for American app developers in 2017. With demand for coding skills stronger than ever, today there are more than 500,000 unfilled programming-related positions across the country, and the US Bureau of Labor Statistics predicts that by 2020 there will be 1.4 million more software development jobs than applicants qualified to fill them.
To address the coding skills gap and help prepare more people for jobs in software development, Apple created a powerful yet easy-to-learn coding language called Swift, the free Swift Playgrounds app and a free curriculum, App Development with Swift, which are available to anyone and are already being used by millions of students at K-12 schools, summer camps and leading community colleges across the country. Over 100,000 students and teachers have also attended coding classes at Apple retail stores.
Apple will expand these initiatives and add new programs to support teachers and teacher training. The company is also increasing funding for its ConnectED program, so students in historically underserved communities have a chance to learn app coding skills and enjoy other benefits of technology in the classroom.
This article was originally published on www.inc.com, viewed 18th January 2018