Apple to Pay $38 Billion in Repatriation Tax; Plans New U.S. Campus -- Update
January 17 2018 - 4:31PM
Dow Jones News
By Tripp Mickle
Apple Inc. said it would make a one-time tax payment of $38
billion to repatriate overseas cash holdings and also ramp up its
spending in the U.S., as it seeks to emphasize its contributions to
the U.S. economy after years of taking criticism for outsourcing
manufacturing to China.
The tech giant said Wednesday it plans $30 billion in capital
spending in the U.S. over five years that will create more than
20,000 new jobs. It didn't specify how much of that spending was
already planned, but said the total will include building a new
facility that initially will house customer-service operations, and
$10 billion toward data centers across the country. Apple also is
expanding from $1 billion to $5 billion a fund it established last
year for investing in advanced manufacturing in the U.S.
Chief Executive Tim Cook touted the plans as building on Apple's
support for the U.S. economy. "We have a deep sense of
responsibility to give back to our country and the people who help
make our success possible," he said in a statement.
Apple said its one-time tax payment was the result of recent
changes to U.S. tax law, under which companies can pay a one-time
tax of 15.5% on overseas cash holdings repatriated to the U.S. The
company said in November that it had earmarked $36 billion to cover
deferred taxes on its $252.3 billion in overseas cash holdings,
assuming that it would eventually pay some tax for bringing that
home.
Apple has faced criticism over the past decade for the overseas
manufacturing of its iPhone, of which it has sold more than 1
billion units, rather than manufacturing devices domestically.
President Donald Trump during the presidential campaign blasted the
company for outsourcing. He later called on Apple to build a
factory in the U.S. and last year said Mr. Cook promised to build
three manufacturing plants in the U.S.
Apple's announcement left many details of its plans unclear, and
a spokesman declined to elaborate. The company didn't say how much
it planned to return of its $252.3 billion in cash and marketable
securities held overseas. It also didn't specify whether it plans
to increase dividends or share repurchases, which is something its
top executives had said would be a priority following the change in
U.S. tax law.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
January 17, 2018 16:16 ET (21:16 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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