North Carolina House passes tax breaks for $1B Apple investment

Apple Computers has showed interest in building a massive $1 billion data center in North Carolina.

Today, the North Carolina House voted in favor (81 to 31) of a bill that would grant up to $46 million to Apple in tax breaks over the next ten years.

The bill includes various provisions for Apple to get the breaks. Apple would have to provide health insurance, give up other state benefits, and would have to build the facility in one of the poorest counties. Additionally, Apple would have to also reach its $1 billion investment within nine years.

North Carolina in the past has changed existing laws to provide cash incentives to companies making significant investments.

 North Carolina provided $260 million in breaks for Google, and in 2004 agreed to provide $280+ million in breaks for Dell. In 2004, Dell built the Winston-Salem plant in NC after the local governments agreed to provide $280 million in breaks over time assuming the plant would employ 1,700 people by the end of September 2010. The plant currently employees just over 1,400 people.

Opponents of the current bill argue existing laws should not be changed for a single company just because it has enough money. Republic Johnathan Ryhne said today the bill “amounts to selling ourselves,” and added “What this bill says is if somebody brings us enough money we’ll change the law for them,”

Proponents favor the breaks citing much needed longer-term economic benefits. Current parts of North Carolina are experiencing double digit unemployment rates, while aggregately the state last had 4% unemployment according to the U.S. Department of Labour in April 2009.

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Hercules holds a B.Comm Finance from Ryerson University in Toronto, Canada. He is a Chartered Financial Analyst (CFA) level 3 candidate. He was previously a contributor at FiLife, a finance website owned by Dow Jones and IAC. Write to [email protected]
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