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Apple Data Center Tango

Apple

Apple and Arizona are dancing. They sway to and fro.  The Dance is the Apple Data Center Tango.  The Credits and rebates are on the line and Arizona and Apple are dancing to come to terms on The Data Center Tango.

Dancing in the moonlight
Everybodys feeling warm and bright
Its such a fine and natural sight
Everybodys dancing in the moonlight

I recently wrote an blog about Apple losing credits and rebates by switching the use of it’s Signal Butte and Elliot plant.  I now see that may not be so.

According to  KJZZ public radio reporter Kristena Hansen, a Cronkite School alum’s report, state lawmakers are considering a new package that would allow Apple’s “international operations center,” as the proposal calls it, to take advantage of the same tax breaks that were approved last year for manufacturers and designated specifically for Apple’s then-manufacturing facility.

The current proposal would mean at least $28 million in income and sales tax breaks for Apple, according to the proposed legislation and estimates by the Joint Legislative Budget Committee. (Apple decided not to accept $10 million from a different state fund that had been promised as part of the initial factory deal.)

That’s on top of the roughly $1 million per year Apple has already saved in property taxes this year and last because the Mesa facility is located within a Foreign Trade Subzone, according to calculations by KJZZ based on formulas and property information from the Maricopa County Assessor’s and Treasurer’s offices.

Businesses located within Foreign Trade Subzones and Zones, which are federally designated geographic areas, are exempt from various customs duties and taxes.

FTZ businesses enjoy an additional perk in Arizona that’s not offered in other states: lower property taxes. Apple and other Arizona FTZ businesses pay a 5 percent property tax rate versus the normal commercial rate of around 18.5 percent.

As a global command center, however, Apple’s facility would technically lose its FTZ status because it would no longer be involved in manufacturing and distribution activities as is required, Bill Jabjiniak, Mesa’s economic development director, told KJZZ.

But Apple is trying to prevent that from happening. Jabjiniak said the tech giant is currently working with U.S. Customs and Border Protection, which supervises FTZs, to see how it can maintain its FTZ status, since it will be importing and exporting parts.

In the meantime, Mesa can still claim to be an Apple location. The computer company just won’t be producing something you can hold in your hand.

The previous blog was–Apple Data Center

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