In response to a New York Times article criticising its tax strategies, Apple issued a statement describing itself as “one of the top corporate income taxpayers in the country, if not the largest,” and confirming that: “In fiscal 2012 we paid $6 billion in federal corporate income taxes, which is 1 out of every 40 dollars in corporate income taxes collected by the U.S. government.”
However, reports are suggesting that while US$6 billion is a lot of money, it’s only a fraction of what Apple should be paying in taxes. Apple has previously been criticised for its skill at avoiding paying taxes. Strategies include allocating 70% of its profits overseas to take advantage of lower taxes, as well as re-routing revenue to an office in Reno, because Nevada corporate tax is 0%, compared to California’s 8%.
In response to the New York Times piece, Apple said that it: “Conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules.”
Apple is one of a number of companies whose tax practices are being investigated by US congress. This enquiry by the Senate Permanent Subcommittee on Investigations is said to be drawing to a close. Describing the investigation, Senator Levin said: “The resulting loss of revenue is one significant cause of the budget deficit, and adds to the tax burden that ordinary Americans bear.”
At the close of the 2012 fiscal year (ending 29 September), Apple had US$82.6 billion in cash overseas. The company paid just US$713 million in taxes on its foreign earnings of US$36.8 billion for the fiscal year, notes Mashable.