Apple wooed by tax incentives, labor pool in $1B North Carolina expansion

Posted:
in General Discussion edited July 2
Apple is planning a massive expansion of its innovation and manufacturing footprint in the U.S., including a new $1 billion engineering hub in Raleigh, North Carolina.

Credit: Raleigh, North Carolina
Credit: Raleigh, North Carolina


The decision to construct a massive facility in Raleigh's Research Triangle didn't happen by accident, however. A new CNBC report details how much effort North Carolina put into attracting Apple to the state.

According to CNBC, both the pandemic and social upheaval have changed the competitive landscape for how states attract technology companies. Some factors in the negotiation, which kicked off in 2018, included diversity and inclusiveness, tax incentives, and Apple's return to in-office work.

For example, CNBC reports that diversity, equity, and inclusion were all a part of discussions about Apple's expansion in North Carolina. However, Apple didn't appear to lay out specific requirements.

However, a bill passed in 2016 that nullified a local ordinance in Charlotte allowing transgender people to use the bathroom of their choosing drew controversy. State officials confirmed in April that the bill, which was eventually rewritten in 2017, didn't mesh with Apple's focus on diversity.

"There's no question that Apple believes strongly in equity and inclusion, and doesn't want to see those types of bills," said Gov. Roy Cooper on April 26.

Apple previously passed on a project to build a hub in North Carolina in 2018. State officials contended that it may have been because of the controversial legislation.

Tax incentives were also important. For example, Apple will be able to collect $845 million in tax breaks over 39 years if it hits certain hiring commitments. That marks the largest tax incentive package in North Carolina's history.

State officials indicate that the tax breaks will be worth it, since the economic impact of the engineering hub could be about $1.5 billion. Apple has also committed to contributing $110 million toward statewide infrastructure improvements and $100 million toward education.

Sources familiar with the negotiations said key factors in Apple's selection include a highly educated workforce and the fact that North Carolina has a concentration of higher education institutions. Quality of life considerations also played a role in the decision-making process.

Additionally, Apple -- unlike many tech companies -- is not planning to expand its remote work options significantly after the pandemic.

While a return to in-office work could necessitate large engineering hubs, it may also put a strain on local housing markets, CNBC pointed out.

Apple's $1 billion engineering hub will employ 3,000 people in innovative fields like machine learning, artificial intelligence, and software engineering. It'll be Apple's first major corporate campus on the East Coast.

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Comments

  • Reply 1 of 17
    lmasantilmasanti Posts: 126member
    quote: “ It'll be Apple's first major corporate campus on the East Coast.

    Alzheimer blurs my mind… but don't Apple has a big server farm in North Carolina?

    (Yes, I know the difference between a 3.000 employees ‘campus’ and a 100 employees ‘server farm.’)
  • Reply 2 of 17
    lmasanti said:
    quote: “ It'll be Apple's first major corporate campus on the East Coast.”

    Alzheimer blurs my mind… but don't Apple has a big server farm in North Carolina?

    (Yes, I know the difference between a 3.000 employees ‘campus’ and a 100 employees ‘server farm.’)
    They clearly specified “corporate campus” a data center isn’t a corporate campus.
    edited July 3 CloudTalkinronn
  • Reply 3 of 17
    GeorgeBMacGeorgeBMac Posts: 10,502member
    The U.S. and the world have officially recognized that these tax havens create a "race to the bottom" that is undermining the ability of countries to fund themselves.

    It's time that the United States recognized that the problem is as much internal as it is international.
    Apple and others make money throughout the U.S. but too often place central sites in these tax havens.
  • Reply 4 of 17
    fred1fred1 Posts: 840member

    They clearly specified “corporate campus” a data center isn’t a corporate campus.
    I agree. What I don’t see is the manufacturing mentioned in the first sentence of the article. 
    CloudTalkin
  • Reply 5 of 17
    crowleycrowley Posts: 8,908member

    Additionally, Apple -- unlike many tech companies -- is not planning to expand its remote work options significantly after the pandemic.
    I'd call 2 out of 5 days, aka 40%, a significant expansion.
  • Reply 6 of 17
    crowley said:

    Additionally, Apple -- unlike many tech companies -- is not planning to expand its remote work options significantly after the pandemic.
    I'd call 2 out of 5 days, aka 40%, a significant expansion.
    Not to mention their plans to allow the retail stores to work remotely, that sounds significant given retail is traditionally seen as an in person kind of thing. 
  • Reply 7 of 17
    The U.S. and the world have officially recognized that these tax havens create a "race to the bottom" that is undermining the ability of countries to fund themselves.

    It's time that the United States recognized that the problem is as much internal as it is international.
    Apple and others make money throughout the U.S. but too often place central sites in these tax havens.
    The 'tax havens' you are talking about are for corporate income tax and that isn't the type of tax breaks that are offered in deals like this. The state would also be limited in what it could offer in terms of income tax since the majority of income tax is collected by the federal government and a state can't negotiate a federal tax rate.  Further the office itself is likely to generate little income as Apple sales happen via the online Apple online store or Apple retail store and these offices are neither of those. 
    edited July 3
  • Reply 8 of 17
    lmasanti said:
    quote: “ It'll be Apple's first major corporate campus on the East Coast.”

    Alzheimer blurs my mind… but don't Apple has a big server farm in North Carolina?

    (Yes, I know the difference between a 3.000 employees ‘campus’ and a 100 employees ‘server farm.’)
    Yes—Maiden NC, about an hour west of Charlotte. 
  • Reply 9 of 17
    fred1 said:

    They clearly specified “corporate campus” a data center isn’t a corporate campus.
    I agree. What I don’t see is the manufacturing mentioned in the first sentence of the article. 
    It doesn’t. It refers to the complex in NC as a “$1B engineering hub”.
  • Reply 10 of 17
    fred1fred1 Posts: 840member
    fred1 said:

    They clearly specified “corporate campus” a data center isn’t a corporate campus.
    I agree. What I don’t see is the manufacturing mentioned in the first sentence of the article. 
    It doesn’t. It refers to the complex in NC as a “$1B engineering hub”.
    “ Apple is planning a massive expansion of its innovation and manufacturing footprint in the U.S., . . .”
  • Reply 11 of 17
    GeorgeBMacGeorgeBMac Posts: 10,502member
    The U.S. and the world have officially recognized that these tax havens create a "race to the bottom" that is undermining the ability of countries to fund themselves.

    It's time that the United States recognized that the problem is as much internal as it is international.
    Apple and others make money throughout the U.S. but too often place central sites in these tax havens.
    The 'tax havens' you are talking about are for corporate income tax and that isn't the type of tax breaks that are offered in deals like this. The state would also be limited in what it could offer in terms of income tax since the majority of income tax is collected by the federal government and a state can't negotiate a federal tax rate.  Further the office itself is likely to generate little income as Apple sales happen via the online Apple online store or Apple retail store and these offices are neither of those. 

    States tax too (or not).
    Also, NC is one of the states with anti-union laws.


  • Reply 12 of 17
    The U.S. and the world have officially recognized that these tax havens create a "race to the bottom" that is undermining the ability of countries to fund themselves.

    It's time that the United States recognized that the problem is as much internal as it is international.
    Apple and others make money throughout the U.S. but too often place central sites in these tax havens.
    The 'tax havens' you are talking about are for corporate income tax and that isn't the type of tax breaks that are offered in deals like this. The state would also be limited in what it could offer in terms of income tax since the majority of income tax is collected by the federal government and a state can't negotiate a federal tax rate.  Further the office itself is likely to generate little income as Apple sales happen via the online Apple online store or Apple retail store and these offices are neither of those. 

    States tax too (or not).
    Also, NC is one of the states with anti-union laws.


    All I’m getting from this is that you don’t know what the deal Apple struck is or what the actual tax implications are. I’m also not sure what unions have to do with the subject of tax breaks. Sounds like you largely want to complain about the situation for the sake of complaining.
    edited July 4
  • Reply 13 of 17
    fred1 said:
    fred1 said:

    They clearly specified “corporate campus” a data center isn’t a corporate campus.
    I agree. What I don’t see is the manufacturing mentioned in the first sentence of the article. 
    It doesn’t. It refers to the complex in NC as a “$1B engineering hub”.
    “ Apple is planning a massive expansion of its innovation and manufacturing footprint in the U.S., . . .”
    You realize that what you are quoting says in the U.S. and not North Carolina right?
  • Reply 14 of 17
    crowleycrowley Posts: 8,908member
    fred1 said:
    fred1 said:

    They clearly specified “corporate campus” a data center isn’t a corporate campus.
    I agree. What I don’t see is the manufacturing mentioned in the first sentence of the article. 
    It doesn’t. It refers to the complex in NC as a “$1B engineering hub”.
    “ Apple is planning a massive expansion of its innovation and manufacturing footprint in the U.S., . . .”
    "... including a new $1 billion engineering hub in Raleigh, North Carolina."

    i.e. not wholly 100% completely delivered by a new $1 billion engineering hub in Raleigh, North Carolina.
  • Reply 15 of 17
    danoxdanox Posts: 636member
    The U.S. and the world have officially recognized that these tax havens create a "race to the bottom" that is undermining the ability of countries to fund themselves.

    It's time that the United States recognized that the problem is as much internal as it is international.
    Apple and others make money throughout the U.S. but too often place central sites in these tax havens.
    The 'tax havens' you are talking about are for corporate income tax and that isn't the type of tax breaks that are offered in deals like this. The state would also be limited in what it could offer in terms of income tax since the majority of income tax is collected by the federal government and a state can't negotiate a federal tax rate.  Further the office itself is likely to generate little income as Apple sales happen via the online Apple online store or Apple retail store and these offices are neither of those. 

    States tax too (or not).
    Also, NC is one of the states with anti-union laws.



    The entire Southeast is anti union and anti worker, and so is half the country (getting their gig on with dead end jobs), however there are still some very union plumbing, pipe fitter, electrical, HVAC, and fire sprinkler piping jobs out there that pay very well and are still unionize and they won’t break the school loan piggy bank.

    Note working remotely is the first step out the door, from time to time in design over the years management try it, but in construction you have to be on the job to do the best job, if you have go to court later on saying remote access only won’t cut it.
    edited July 4 GeorgeBMac
  • Reply 16 of 17
    davidwdavidw Posts: 1,346member
    The U.S. and the world have officially recognized that these tax havens create a "race to the bottom" that is undermining the ability of countries to fund themselves.

    It's time that the United States recognized that the problem is as much internal as it is international.
    Apple and others make money throughout the U.S. but too often place central sites in these tax havens.
    The 'tax havens' you are talking about are for corporate income tax and that isn't the type of tax breaks that are offered in deals like this. The state would also be limited in what it could offer in terms of income tax since the majority of income tax is collected by the federal government and a state can't negotiate a federal tax rate.  Further the office itself is likely to generate little income as Apple sales happen via the online Apple online store or Apple retail store and these offices are neither of those. 

    States tax too (or not).
    Also, NC is one of the states with anti-union laws.


    Its not Apple HQ. Apple pays a State corporate tax in CA, where their US HQ is located. And CA can not be even remotely considered a "tax haven".  If there're are any State tax to pay in NC, it will only be on the revenue they generate in NC. Like from an Apple Store. 

    My bet is that most of the tax breaks Apple got are from property tax assessments and business operating permit fees, not from any revenue they generate in NC.  
  • Reply 17 of 17
    fred1 said:
    fred1 said:

    They clearly specified “corporate campus” a data center isn’t a corporate campus.
    I agree. What I don’t see is the manufacturing mentioned in the first sentence of the article. 
    It doesn’t. It refers to the complex in NC as a “$1B engineering hub”.
    “ Apple is planning a massive expansion of its innovation and manufacturing footprint in the U.S., . . .”
    It is understandably difficult to have proper reading comprehension when limiting oneself to only portions of sentences.  

    “Apple is planning a massive expansion of its innovation and manufacturing footprint in the US”, which includes the Raleigh facility. This operation is slated to assist in engineering efforts, while other planned sites, such as one in Austin, may devote space to manufacturing efforts. ALL of these various planned investments in the US fall under an umbrella of an “expansion of its innovation and manufacturing footprint”, while not guaranteeing each facility will add assist in BOTH efforts. 

    The story was very clear in that regard. 
    GeorgeBMac
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