More on Apple Data Center Tango

The dance goes on.  The Apple data center may still get property tax breaks.  Apple and the Arizona Commerce Authority….or maybe the Governor’s Office are still negotiating….dancing  Does Apple do importing and exporting at the new data center? Will they qualify to be a FTZ zone?  Does it matter?

Apple Inc. may have to get new federal approvals and do some kind of importing and exporting at its planned Mesa data center in order to keep lucrative property tax breaks.  Which of course they want.
The technology company may still qualify for a reduced 5 percent property tax even if does not do any manufacturing at the East Valley center.The issue is money.  Apple saves a lot of money by being in a  FTZ zone.  Apple pays a 5 percent state property tax rate because of that FTZ status. Most other Arizona businesses pay an 18.5 percent rate. That saves the technology giant between $880,000 and $1 million annually at its 1.3 million-square-foot Mesa building. That is a lot by anyone’s standards.  It is certainly worth fighting for.
Shea Joachim, senior economic development for the city of Mesa, oversees Foreign Trade Zone #221 at the local level.

Joachim said the current FTZ agreement is with GT Advanced Technologies, the bankrupt supplier that was supposed to make sapphire glass components for Apple products at the Mesa building. GTAT filed for Chapter 11 bankruptcy last year. Production operations never got going and the 700 promised manufacturing jobs vanished.

Still, Apple reaped the property tax breaks from FTZ 221. they reaped a lot of breaks.

Apple (Nasdaq: AAPL) paid $358,500 in property taxes last year for its Mesa building, according to county records.

That compares to First Solar (NYSE: FSLR), which paid more than $1.2 million in property taxes in 2013, also according to county records.

Joachim said Apple would still be able to qualify for FTZ property tax breaks and duty-free benefits if it is importing, exporting or doing some sort of international logistics from the Mesa data center location.

“It doesn’t have to be production. It doesn’t have to be manufacturing,” said Joachim.

Other FTZs in the state house manufacturing operations such as Intel’s semiconductor campus in Chandler and ConAir’s plant in Glendale.

Apple and state officials are tight-lipped about what kind of tax breaks and other incentives the company might receive for the command center or how Apple can still qualify for Foreign Trade Zone tax benefits.

An Apple representative referred questions about FTZ status and the reduced 5 percent rate to the Arizona Commerce Authority. An ACA spokesman referred questions about Apple to the Governor’s Office.

So no one is talking.  Lets watch and see how this turns out.  I have written 2 other blogs on this topic–Apple Won’t Get Credits and Rebates for Revised Mesa Plan  and Apple Data Center Tango