Apple Inc is planning to build a new corporate campus and hire 20,000 U.S. workers in an expansion driven in part by a tax cut that would enable the iPhone maker to bring an estimated US$245 billion back to its home country. Over the next 5 years, Apple plans to generate an estimated 20,000 jobs for the U.S. This year, $55 billion of the amount will be brought back into American borders.
The pledge announced on Wednesday comes less than a month after the US Congress approved a sweeping overhaul of the US tax code championed by US President Donald Trump that would increase corporate profits.
Apple, already the largest U.S. taxpayer, anticipates repatriation tax payments of $38 billion as required by recent changes to the tax law. Apple will announce the location of this new facility later in the year.
While Apple is likely to return some of its overseas money to its shareholders, Wednesday's announcement is created to be a show of faith in the USA - the company's largest market.
That was what happened past year after Amazon announced it would build a second headquarters in North America to expand beyond its current Seattle home. As of the end of the September quarter, Apple had $252.3 billion in overseas cash, according to filings with the Securities and Exchange Commission.
Apple said it will concentrate its new investments in "three areas where Apple has had the greatest impact on job creation: direct employment by Apple, spending and investment with Apple's domestic suppliers and manufacturers, and fueling the fast-growing app economy which Apple created with iPhone and the App Store".
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However, chief strategy officer of GBH Insights, Daniel Ives, told Mercury News,"It would have been tax suicide if they brought it back before the reform law".
"There was an ironclad reason why large-capital tech companies like Apple could not bring (overseas cash) home", said Ives.
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That anticipated tax bill implies Apple intends to bring back about US$245 billion of its overseas cash, based on the temporary tax rate of 15.5 percent on foreign profits.
Additionally, the press release said that "capital expenditures in the U.S., investments in American manufacturing over five years and a record tax payment upon repatriation of overseas profits will account for approximately $75 billion of Apple's direct contribution".
Apple shares rose 1.65 percent to $179.1 a share Wednesday after it announced its plans.