Earlier this week, I posted about a potential tax holiday for multinational companies; the holiday would allow them to repatriate funds currently being held offshore at a lower tax rate. The idea, which has been bandied about by Rep. Eric Cantor (R-VA) and Sen. Orrin Hatch (R-UT) – but not endorsed by Treasury Secretary Geithner – has mostly been whispered around in tax circles. Now, it seems, that names are starting to drop.
Top of the name dropping list? One of the most profitable companies in the world right now: Apple.
It’s been no secret that Apple, like Microsoft, Pfizer and other hot companies, have been shopping around for tax venues. Those companies, in particular, have settled in at various garden spots around the world that offer attractive tax structures like Ireland. However, with fortunes and political climates changing, maybe – just maybe – companies are thinking about heading back to the U.S. (Can I add just one more “maybe” for good measure?)
But there are definitely some caveats. The big one? Clearly, they don’t want to pay the tax to do it.
That’s why ears pricked in fall 2010 when Apple CEO Steve Jobs noted that the company was holding onto cash waiting for “one or more unique strategic opportunities.” Hmm.
Apple is merely one of a handful of companies said to be making a play for the tax holiday. The usual suspects, mostly tech and pharma companies, are also reportedly poking around DC to see if they can up their chances.
Of course, there’s poking and then there’s poking. Apple recently signed on the lobbying firm of Fierce, Isakowitz and Blalock of Washington, DC. Rumors abound that the company hopes to get cozy with new GOP leadership in the Congress that might be more friendly to their financial and privacy concerns; it’s an interesting position for a company that has, to date, been careful about its political alignments.
The move also raises a few questions about the direction of any so-called corporate tax reform. To date, most of the talk about reform has focused on the need to fix loopholes and recover lost revenue – clearly, companies have different ideas. My guess is that we’re about to find out what those are…