Public silent on Apple tax breaks
July 30, 2012
There were no takers today for the chance to weigh in on $89 million in tax breaks being offered to Apple in exchange for the company building a data center and related facilities in the Reno area that are expected to bring $1 billion in investment over the next decade.
The hearing on the proposed sales and personal property tax abatements, made as part of a deal to bring Apple to Northern Nevada, did not generate a single comment.
Today’s hearing, conducted by Steve Hill, director of the Governor’s Office of Economic Development, was continued to Wednesday when the Economic Development Board, including Gov. Brian Sandoval, will consider the tax breaks in a special meeting.
But Hill said the ultimate decision to grant the incentives to Apple will be his to make under the provisions of the law creating the new agency approved by the 2011 Legislature.
Some questions have been raised about whether the tax breaks offered to bring Apple to Nevada will be a good investment over the long term.
But Hill said he has not heard any comments from people who are highly upset about the proposal.
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“I think it’s reasonable to question, OK, is that a good deal and why is that a good deal and should we continue to make those kind of deals as we go forward,” he said. “We have not heard a lot of, ‘you should not have done this.’ “
“In my opinion this is a terrific deal for Northern Nevada,” Hill said. “In order for us to be competitive, our tax structure, or the abatements that we give out, are going to have to make us competitive as a place.”
Sandoval has already gone on record as supporting the tax incentives. In an interview on Nevada NewsMakers last month, he said: “There are 49 other states who would have loved to have what we have. And there were negotiations that went on back-and-forth. I had an opportunity to meet with some of the Apple officials early on and I think it was a great outcome for Nevada.
“I think it’s going to be a very strong magnet for us,” he said. “It shows that we’re in the game. It’s very competitive for these data centers across the United States. And Apple is going to look to see where we can go.”
Hill said after the hearing today that other firms have contacted his office inquiring what the state has to offer following the announcement of the Apple deal. There is no guarantee that the same level or type of abatements will be offered to other companies that may want to relocate here, he said.=
The Washoe County Commission, the Washoe County School Board and the Reno City Council have all already given their approval to deal.
The sales tax abatement will mean Apple will pay only half a percent of the levy on what they buy during as part of the agreement, Hill said. The personal property tax abatement is worth 85 percent, but does not include construction-related activity. The first $100 million in construction by Apple includes no abatements, Hill said.
The abatements are contingent upon Apple making a minimum investment in its facilities in the Reno area during the life of the agreement.
The company will end up paying a minimum of $20 million in a variety of taxes over 10 years as a result of the abatements.