Apple could receive up to 20 years in tax breaks for solar-powered Arizona data center

Posted:
in General Discussion edited February 2015
Apple's forthcoming "global command center" for its online operations in Mesa, Ariz., could be the beneficiary of up to 20 years' worth of tax breaks, thanks to new rules proposed by the state legislature.

Mesa


Republican Sen. Jeff Dial believes Arizona's laws, which he hopes to clarify with a new bill, will allow Apple to qualify for at least 10 years' worth of equipment tax breaks, according to the Phoenix Business Journal. Some benefits could stretch out to 20 years, he said, falling under the category of "sustainable redevelopment projects."

Legislators are also reportedly adjusting the energy tax breaks that were previously granted to Apple, when the facility was originally intended for producing sapphire. Those credits were announced in 2013 when then-Governor Jan Brewer touted Apple's presence as a major economic driver for the state of Arizona.

Local government has further incentivized the use of land owned by Apple and others in Mesa by designating it as a foreign trade zone. That was said to shave as much as 70 percent off the company's annual property tax bill.

FTZ
Aerial view of Apple's Subzone 221A in Mesa's foreign trade zone. | Source: ITA


It's been a long, strange trip for Apple's Mesa, Ariz., operations, originally intended to be operated by GT Advanced Technologies for sapphire production. But after GTAT filed for bankruptcy, Apple vowed to repurpose the facilities it had built there.

Those plans were revealed earlier this month when Apple announced it will build a $2 billion green data center in Mesa. The facility will employ 150 people full-time and will serve as the control center for Apple's four other U.S. based data operations.

Apple's data "global command center" will be powered by 100 percent renewable energy, most of which will come from a new local solar farm. Construction on the facility is expected to start by late 2016.

In the meantime, the facility still houses furnaces purchased by GTAT and Apple for creating sapphire. Those furnaces are being liquidated as part of GTAT's bankruptcy proceedings.
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Comments

  • Reply 1 of 61
    They don't need tax breaks. Paying taxes to the state to allow them to run that system is a win/win for both sides.
  • Reply 2 of 61
    davendaven Posts: 485member
    As an Apple shareholder, I like it. As a taxpayer, I'm glad that I don't live in Arizona and have to make up for the loss out of my pocket!
  • Reply 3 of 61
    Quote:

    Originally Posted by DaveN View Post



    As an Apple shareholder, I like it. As a taxpayer, I'm glad that I don't live in Arizona and have to make up for the loss out of my pocket!



    Excuse me? Loss? you counting eggs you don't have? Apple coming there ADDs to the consumer tax based and still adds to the Arizona state tax base.. 

     

    Always confuses me when people count the 2 hens in the bush, what they don't have, as a loss, over what they do have..

  • Reply 4 of 61
    adrayven wrote: »

    Excuse me? Loss? you counting eggs you don't have? Apple coming there ADDs to the consumer tax based and still adds to the Arizona state tax base.. 

    Always confuses me when people count the 2 hens in the bush, what they don't have, as a loss, over what they do have..

    If everyone used the eggs that they have very few people would own a house, a car, or even a smartphone.
  • Reply 5 of 61
    As a longtime az resident in the it industry, az has always offered sometimes desperate tax incentives for projects like this...the problem is just that the talent generally isn't there and quickly leaves for greener pastures in ca.
  • Reply 6 of 61
    jd_in_sbjd_in_sb Posts: 1,483member
    daven wrote: »
    As an Apple shareholder, I like it. As a taxpayer, I'm glad that I don't live in Arizona and have to make up for the loss out of my pocket!

    If Arizona wasn't so tax-friendly this facility would simply be in Texas. No loss out of Arizona tax payers' pocket in either case.
  • Reply 7 of 61
    sog35 wrote: »
    Why?  Would you rather have that land be vacant?  Would you rather have the factory not producing ANY tax income?  Or any jobs?

    Its a win/win for Apple and AZ residents.  More jobs, more tax revenue.

    Exactly, some tax money is better than none plus the added income tax.
  • Reply 8 of 61
    jd_in_sbjd_in_sb Posts: 1,483member
    adrayven wrote: »

    Excuse me? Loss? you counting eggs you don't have? Apple coming there ADDs to the consumer tax based and still adds to the Arizona state tax base.. 

    Always confuses me when people count the 2 hens in the bush, what they don't have, as a loss, over what they do have..

    It's just liberal math
  • Reply 9 of 61
    crowleycrowley Posts: 5,635member
    Race to the bottoms taxonomics. Yuck.

    Still, don't hate the player... etc.
  • Reply 10 of 61
    lkrupplkrupp Posts: 6,608member
    Quote:
    Originally Posted by Adrayven View Post

     



    Excuse me? Loss? you counting eggs you don't have? Apple coming there ADDs to the consumer tax based and still adds to the Arizona state tax base.. 

     

    Always confuses me when people count the 2 hens in the bush, what they don't have, as a loss, over what they do have..




    A certain segment of the population have been voluntarily brainwashed by this notion of “fair share” and that corporations are evil and a detriment to society. The rich have what they have because they are evil and exploitative. Ironically many of these people are of Judeo-Christian background and are always squawking about social and economic justice. But one of the Ten Commandments says Thou Shalt Not Covet They Neighbors Goods. Apparently that doesn’t apply to the 1% whose goods they are so anxious to confiscate in the name of fairness. 

  • Reply 11 of 61
    gatorguygatorguy Posts: 19,805member
    sog35 wrote: »
    Why?  Would you rather have that land be vacant?  Would you rather have the factory not producing ANY tax income?  Or any jobs?

    Its a win/win for Apple and AZ residents.  More jobs, more tax revenue.
    The land WASN'T vacant and Apple already planned to use the factory and hire employees. Why offer more tax breaks after the fact, particularly since the state will be expected to maintain and improve the roads and other pertinent infrastructure leading to the plant. :???: To me it sounds just as silly as Apple telling an online iPad buyer who already hit the pay button to knock another $100 off after the fact. A dumb thing that Apple or any other commercial enterprise would never do yet governments make these stupid unnecessary wink-wink deals all the time.

    So where will the state make up the tax revenue that Apple should have been paying and would have? From Arizona residents of course. They also chose to move and work there, yet received no tax breaks to do so.
  • Reply 12 of 61
    jd_in_sbjd_in_sb Posts: 1,483member
    gatorguy wrote: »
    So where will the state make up the tax revenue that Apple should have been paying and would have?

    The state doesn't have to "make up" for something they never had to begin with.
  • Reply 13 of 61
    jfc1138jfc1138 Posts: 3,090member
    Quote:

    Originally Posted by jd_in_sb View Post





    It's just liberal math



    Ever smaller government is the conservative nirvana as is ever smaller tax burdens, so what's not to love?

  • Reply 14 of 61
    Quote:

    Originally Posted by jd_in_sb View Post





    The state doesn't have to "make up" for something they never had to begin with.

     

    If the state has to build and maintain the roads, sewer/water, and other facilities to support the Apple plant, and the cost of that is less than the tax revenue of the new employees, then this may be a bad move for the state. Of course, if the added revenue is greater than the cost, it is a win for the state.

     

    I'm generally in favor of tax breaks, but a lot of times it is not clear if cities or states really do a sensible cost/benefit analysis or if they are guided by a knee-jerk "Taxes bad! Growth good!" or a "Taxes good! Companies bad!" mentality.

  • Reply 15 of 61
    jfc1138jfc1138 Posts: 3,090member
    Quote:

    Originally Posted by afrodri View Post

     

     

    If the state has to build and maintain the roads, sewer/water, and other facilities to support the Apple plant, and the cost of that is less than the tax revenue of the new employees, then this may be a bad move for the state. Of course, if the added revenue is greater than the cost, it is a win for the state.

     

    I'm generally in favor of tax breaks, but a lot of times it is not clear if cities or states really do a sensible cost/benefit analysis or if they are guided by a knee-jerk "Taxes bad! Growth good!" or a "Taxes good! Companies bad!" mentality.




    "a sensible cost/benefit analysis" Certainly largely absent from their approach to sports cathedrals.

  • Reply 16 of 61
    gatorguygatorguy Posts: 19,805member
    sog35 wrote: »
    really?  Are you really that dense.

    Without these tax breaks Apple would have moved to Texas or some other tax friendly state.  Then who would 'make up' that tax income loss?  Some of you don't see the big picture and only isolate one part of the equation.
    Dense? Hardly! The insult makes you look a bit silly considering the facts.

    From the first paragraph:
    "Apple's forthcoming "global command center" for its online operations in Mesa, Ariz., could be the beneficiary of up to 20 years' worth of tax breaks, thanks to new rules proposed by the state legislature."

    Apple was already committed. They weren't going to Texas and do not need another tax break to convince them to stay. :no:
  • Reply 17 of 61
    gatorguygatorguy Posts: 19,805member
    jd_in_sb wrote: »
    The state doesn't have to "make up" for something they never had to begin with.
    An obvious cost is the highways. Who is going to pay the the increased traffic wear on the supporting roadways? Not Apple. The Arizona public is always willing and ready to pay a bit extra for it tho.
  • Reply 18 of 61
    gatorguygatorguy Posts: 19,805member
    jd_in_sb wrote: »
    The state doesn't have to "make up" for something they never had to begin with.
    They have it. They're just going to tell Applenot to pay as much once the additional breaks are authorized. Under what reasoning do you think Arizona should cut Apple (or any other company) a break on the already-reduced taxes they were willing to pay and why? Seriously.
  • Reply 19 of 61

    Just an example: Apple received $370 million in tax breaks from North Carolina for creating 50 jobs. Does that seem like a big win for North Carolina taxpayers? Or more like a meaningless giveaway?

  • Reply 20 of 61
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by Gatorguy View Post

     
    Apple was already committed. They weren't going to Texas and do not need another tax break to convince them to stay.


    There are perhaps other considerations such as encouraging Apple to expand their operations in the state. Arizona could be wanting to build up their technology corridor and attract high paying jobs which would benefit home construction, and other service industries. All of the major tech companies tend to group their data centers and R&D facilities near one another for obvious reasons. Arizona is simply reducing any barriers for other companies to move there.

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