[_delirium]

What's annoying to me is not that companies choose jurisdictions based on taxes, but that they get away with playing shell games to fake moving between jurisdictions entirely on paper, which also gives them an advantage over smaller companies and individuals that can't do that.

I lived in California for some years. If it were possible for me to open a P.O. box (or even rent a small office) in Reno, book all my non-California-sourced income (e.g. AdSense) to the Reno P.O. box, and avoid California taxes, maybe I would've. But that's not legal; my attempt to produce a fake domicile in Nevada for tax purposes when I clearly lived ~11 months of the year in California would be correctly judged a sham. If I wanted to claim I'd moved to Reno for tax purposes, I'd have to actually move to Reno in real life, too. Yet Apple can do effectively do that, opening a sham office where no work is done, solely to dodge taxes, because the rules for individuals when it comes to those kinds of fake domiciles are much stricter than the rules for corporations are.

If Apple actually moved its main operations and employees from Cupertino to Reno for tax reasons, that would be another matter entirely, and a more honest example of jurisdictional competition.

[byrneseyeview]

The maneuver you describe is equivalent to incorporating in Delaware (or Nevada, I suppose). You can compound your wealth in the low-tax environment, but you will pay taxes when you try to transfer it to yourself.

Just like Apple, in this case. Under the current legal regime, they have successfully deferred taxes, not evaded them. It's the same way I carefully evade sales taxes by saving some of my money instead of spending every paycheck.

[_delirium]

Afaik, incorporation in Delaware isn't usually tax-related; most Delaware corporations don't actually book their income in Delaware, but are registered there because of favorable corporate law and a business-friendly civil trial system.

You're right on the deferral/transfer with regards to international income (e.g. income Apple books in Ireland and later uses to pay for something in Cupertino), but I don't believe Apple ever pays California income taxes on the income it books in Reno, even if it immediately turns around and uses that income to pay Cupertino salaries. There's no state-to-state equivalent of repatriating income.

[el_presidente]

How much of your paycheck do you save? Apple can afford to wait until the government passes a Homeland Investment Act type law to avoid paying those taxes. OTOH, most people need to pay for things like food, clothes, whatever they're using to post comments on websites, etc.

[jarek]

This is a bad analogy to start with, but Apple's profit is around 24% of their revenue, which would be comparable to saving 24% of your paycheque, which is not at all unreasonable.

[larrys]

"which also gives them an advantage over smaller companies and individuals that can't do that."

So? They also get lower rates on car rentals, hotel rooms, components, office supplies etc. and can choose from a larger pool of potential employees. And a million other things that "smaller companies and individuals" can't.