North Carolina House OKs tax break to attract Apple
Lawmakers in North Carolina on Wednesday voted in favor of proposed changes to the state's tax laws, clearing the way for large investments from companies like Apple.
The House passed the bill 80-34, according to a report by the Charlotte Observer. While it was a healthy majority, some lawmakers protested vehemently about being forced to offer huge tax incentives to big businesses.
The bill, modified by the House, is set to go back to the state Senate on Thursday for a vote.
As reported on Tuesday, North Carolina is hoping to lure Apple by offering the company $46 million in tax breaks. In return, Apple would invest $1 billion to build a server farm in one of the state's poorest areas--Catawba and Cleveland counties are said to be potential sites for investment.
The Associated Press reported that House Minority Leader Rep. Paul Stam (R-Wake) was particularly upset with the proposed incentives. "They're playing us," Stam said. "And they're going to keep playing us as long as you agree to be played. They'll either come or they won't come, but whether they come I can virtually assure you it will not depend upon whether you pass this bill."
This isn't the first time North Carolina has offered tax breaks to large companies. In 2007, Google signed a deal worth $600 million to open a server farm in the state for a promised $260 million worth of incentives over 30 years.
Jim Dalrymple has followed Apple and the Mac industry for the last 15 years, first as part of MacCentral and then in various positions at Macworld. A guitar player for 20 years, Jim also writes about the professional audio market, examining the best ways to write and record songs on a Macintosh with Logic Pro and Pro Tools. Jim is a member of the CNET Blog Network and is not an employee of CNET. 
For a company with barely 10% of the personal computer market share, they sure get 90% of the press coverage. Maybe C/Net should rename themselves Apple/Net.
I don't know of any state that can really afford it these days. If a state pulls a deal like this and gains 100-200 jobs, but then loses the ability to employ 1300 school teachers, is that really a *good* thing?
It's a hard one to answer, and not really one that CNET' coverage is meant to address.
First, using the "school teachers" straw dog is a hack political move, used for decades to raise our taxes even as our education system gets worse. Bravo there. ;)
But beyond that, either Apple comes, or they don't. I don't really care. But if it's either "Apple comes with tax breaks" or "Apple doesn't come because there are no tax breaks", either way, the state DOESN'T GET THE MONEY. So you are talking about a "phantom" 1300 teachers, because no matter what, that money does not exist for you.
They can't lose something they don't have.
But you also have to factor in that NC is not necessarily seen as the tech capital of the USA. So if pulling in companies like Apple and Google works to attract more tech people to the state, it is a long term positive. The answer to "why would I ever start my tech company in NC" becomes "because Apple and Google are there."
Look at what happened with car manufacturing. It was always considered "too expensive" in the USA. But then southern states like SC and Alabama and Tennessee attracted factories for BMW and Mercedes and Toyota, and now the USA isn't seen as "too expensive" but the REAL truth has come out: GM, Ford and Chrysler just can't make cars for less because they are/were poorly run.
Now, everybody and their sister is looking to open up more plants in the south, including the big three, and the benefit is palpable. All because of the initial tax incentives to "plant the seeds" of commerce.
"First, using the "school teachers" straw dog is a hack political move, used for decades to raise our taxes even as our education system gets worse. Bravo there. ;)"
School teachers are just an example. It could be any public service. In my city we have had two fire stations close down because there is not enough tax revenue to keep them going. Dozens of schools have shut down, consolidating them into fewer schools that now offer 60+ student classes per teacher. Road projects scheduled for this year are being put off for five years. There are bridges on highways here that are now closed indefinitely, no funds to pay for repairs.
Ignore the problem all you want, but this is just an example of what can happen. You make concessions in taxes to encourage a company to set up shop and find that you've set yourself up for failure later. This happens frequently.
I'm not sure where you got the idea that the money Apple spends in a state is for me or other tax payers. That doesn't make any sense at all.
Don't get so worked up over it. It could be fine, it could be terrible. I'm just advising caution. It would seem wiser to research something before blindly rushing in, which is the habit state governments have a tendency to do frequently.
- by ultiweb May 30, 2009 10:31 PM PDT
- All the negative comments about NC. Has no one ever heard of Research Triangle Park? There are tons of tech companies in NC. Ever heard of RedHat? Low taxes, good weather and a nice place to live. It's not the Beverly Hillbillies. You have to give up the ridiculous stereotypes.
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(11 Comments)Bottom line, those are poor counties and any kind of opportunity there is a good thing.