Cupertino settles with Apple, pays $12.1M over tax dispute

Published 21/04/2025, 17:02
© Reuters.

Cupertino concluded a sales tax dispute with Apple (NASDAQ:AAPL), agreeing to pay the tech giant $12.1 million. This settlement, confirmed by the City Council and completed in March 2025, puts an end to a contentious issue that has its roots in a 1998 agreement.

Under the terms of the longstanding arrangement, Apple allocated all of its online sales in California to Cupertino, which in turn, enabled the city to receive a share of the sales tax. This agreement became a point of contention as Apple’s digital sales volumes increased, attracting scrutiny from other cities and state tax authorities.

A pivotal audit carried out by the California Department of Tax and Fee Administration in 2023 determined that sales tax should be apportioned based on the delivery location of purchases rather than the company’s headquarters. Originally, Cupertino was anticipated to reimburse Apple $56.5 million. However, a settlement reached in 2024 allowed Cupertino to keep $74.5 million and issue the refund to Apple from its general fund.

The longstanding tax arrangement had been a significant source of funding for city services. However, the recent resolution has prompted a reevaluation of tax incentives and their impact on local governments, especially those with large corporate residents. State officials are now scrutinizing such tax benefits that seem to favor specific cities.

While the refund to Apple is relatively minor in the context of the company’s vast business operations, this case underscores the evolving nature of tax policies in the digital age. For Cupertino, the settlement marks a resolution of the immediate dispute, but it also signals potential changes in the city’s financial strategy in the years ahead.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.