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Apple Park in Cupertino (Source: Apple)
Previously unknown details of California’s deals with local firms have been released, showing that Apple has been paid millions in tax refunds by Cupertino to stay in the area.
If it weren’t widely reported in detail before, it was at least public knowledge that Californian regions such as Cupertino pay back some sales tax to local companies. What hasn’t been clear before is how much that payback amounts to.
According to Bloomberg, the California Department of Tax and Fee Administration (CDTFA) under a new state law, showed that Apple received $64.7 million from Cupertino since 2013. Going back to a previous 1998 deal, Bloomberg research estimates that Apple has received almost $120 million.
The records in the full disclosure are extremely poor, though. Much of the data appears to have been entered by the Californian cities in free text fields, meaning numeric sorting is impossible.
Then very many California cities list only the amounts they have paid back under such deals, and do not name the companies. Cupertino lists two deals, one with Apple and one with Insight Consulting Services Inc., which appears to no longer exist.
Overall, the full filing discloses 185 deals with dates ranging from 1997 to 2023. Among the firms getting the most money is Edison Materials Suppy, which received $73.5 million — but the deal is not comparable to Apple’s as it goes back to 1999.
Then since 2018, Amazon has been paid $1.9 million by the county of Kern. CostCo got $7.7 million from the City of San Dimas since 2007.
And while the report is unclear on the details of this point, Walmart appears to have been paid $21.4 million by the City of San Bruno.
How the deal works
Under Californian state law since the 1950s, firms have to pay 7.25% sales tax. And then the state gets 1%, with which it can choose to incentivize firms to stay.
The law was created in a time when the concept of global online sales was unimaginable, though. What makes sense for local firms is less clear when a company like Apple sells products worldwide.
In 2024, the State of California concluded that it was unfair that Cupertino be the only region to benefit from Apple’s global success. The ensuing disagreement between the state and the town came to a head in October 2024, when the state lost.
