UPDATE: Apollo Group Threatens To Pull Employees From Arizona
April 14 2011 - 3:13PM
Dow Jones News
Apollo Group Inc. (APOL) is threatening to move employees from
Arizona after the company was denied a tax break for business
conducted outside the state.
Phoenix-based Apollo, which operates the University of Phoenix,
pays Arizona state income tax on all revenue, no matter where its
400,000-plus students are based. It also pays taxes in many of the
other states where it conducts business.
At issue is a bill that would have allowed companies that derive
more than 85% of sales from services provided outside the state to
pay local taxes only on its in-state services. It proposed a
formula similar to one in place for companies that sell tangible
goods outside the state.
While Arizona's state legislature had passed the bill, Gov. Jan
Brewer vetoed it Wednesday, citing the state's fragile financial
situation.
"We are very disappointed in Gov. Brewer's decision to veto this
important legislation that would restore tax fairness and make the
state more attractive to business," Apollo spokesman Manny Rivera
said in an emailed statement. "Apollo and other impacted companies
may be forced to investigate options for locating employees in
states whose policies are more fair and equitable."
According to a March story in the Arizona Republic, State Sen.
Rick Murphy estimated Apollo and fellow for-profit college operator
Grand Canyon Education Inc. (LOPE) would save about $20 million
combined.
Grand Canyon said Thursday it would save less than $500,000 a
year. Apollo, which has about 10 times as many students as Grand
Canyon, declined to provide details of how much it had expected to
save.
-By Melissa Korn, Dow Jones Newswires; 212-416-2271;
melissa.korn@dowjones.com
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