In a prepared statement Cook read before a Senate subcommittee yesterday, the chief executive named Texas as the location of a new factory where Apple will assemble Macs.
Cook was in Washington DC to defend Apple’s tax practices after senators accused the California company of dodging its obligations by shunting profits to overseas subsidiaries, including several in Ireland, one of which has allegedly paid no income taxes for five years.
“We’re investing US$100 million to build a Mac product line here in the US,” said Cook, repeating comments made last December in interviews with NBC and BusinessWeek. “The product will be assembled in Texas, include components made in Illinois and Florida, and rely on equipment produced in Kentucky and Michigan.”
Cook’s naming of Texas and the other states was part of a litany of Apple’s US job creation history.
Cook did not elaborate on the facility, when it will come online or what Mac the plant will assemble.
However, in an interview earlier this week with Politico – part of his DC media blitz before Tuesday’s hearing – Cook said that the US factory will begin churning out a new version of a current Mac later this year.
Cook also told the influential blog that components for the new Mac would come from suppliers in Arizona, Texas, Illinois, Florida and Kentucky.
Texas is a natural for Apple.
The company already has a large presence in the Lone Star State’s capital of Austin, and recently broke ground there on a multi-phase project that will add 93,000 square metres of office space to an existing campus. The expansion, scheduled for completion in 2021, will cost an estimated US$304 million and add 3600 jobs to Apple’s Texas workforce.
Texas also has no corporate income tax, although it does collect a gross receipts tax, called a ‘franchise tax’ by the state. According to the Tax Foundation, a tax policy think tank, Texas was rated No. 38 in 2013 for its corporate tax rate, part of the organisation’s overall rating of the most business-friendly states. (In its rankings, the Tax Foundation uses lower numbers to represent states with a lower tax burden on businesses). California, where Apple is headquartered, was ranked No. 45 in the same category.
The Tax Foundation’s overall tally for Texas – which also includes rankings for individuals’ income tax, sales tax, property tax and unemployment tax – was No. 9. Meanwhile, California’s overall ranking was No. 48.
by Gregg Keizer, Computerworld