Forget Amazon. Could Austin be home to Apple’s new HQ2? Turns out Amazon isn’t the only tech giant looking to create a second headquarters.
Turns out Amazon isn’t the only tech giant looking to create a second headquarters.
Apple, which already has a significant presence in Austin, said Wednesday that it wants to spend as much as $30 billion on a brand new corporate campus and additions to its existing work sites across the country.
The headquarters of Apple, the world’s largest consumer electronics company, is in Cupertino, Calif.
The building spree will create an estimated 20,000 new jobs nationwide, Apple said.
Apple said it expects to announce where the new corporate campus will be located later this year. The company didn't say how big the second campus will be, or how many of the additional 20,000 workers that it plans to hire will be based there.
In Austin, Apple’s existing 38-acre complex at West Parmer Lane and Delcour Drive is home to the company’s 1.1 million-square-foot Americas Operations Center, which runs many of its corporate functions throughout the northern hemisphere.
PHOTO GALLERY: Take a peek inside Apple’s Austin campuses.
Direct Apple employment in Austin has tripled in the last 10 years, according to the company, making it Apple’s second-largest U.S. hub outside of Cupertino.
Late last year, Apple said its Austin workforce totaled about 6,500 people.
Erich Schlegel/Austin American-Statesman
AUSTIN, TX - AUGUST 25, 2017 - Apple CEO Tim Cook, right, visits with Senior Specialist Rachel Brown while visiting the company's Austin campus.
Apple CEO Tim Cook visited the Austin campus in August to mark Apple’s 25th year in Austin.
“We started with 100 people back in ‘92,” Cook said in an interview with the Statesman. “Now we’re at over 6,000 and if you look at the teams, they include customer support, online sales, retail sales, we have our Maps team here, and finance and a huge engineering team that’s growing fast. Literally, many, many pieces of our company are here.”
RELATED: Apple CEO Tim Cook says ‘We want to continue to grow’ in Austin.
Apple executives said the company’s new $350 billion commitment to the U.S. will be partially financed by an upcoming windfall from the country's new tax law.
The pledge announced Wednesday comes less than a month after Congress approved a sweeping overhaul of the U.S. tax code championed by President Donald Trump that will increase corporate profits.
In addition to dramatically lowering the standard corporate tax rate, the reforms offer a one-time break on cash being held overseas.
Apple plans to take advantage of that provision to bring back about $252 billion in offshore cash, generating a tax bill of roughly $38 billion. It's something that Apple CEO Tim Cook promised the company would do if it could avoid being taxed at the 35 percent rate that had been in effect under the previous tax law.
About $75 billion of the $350 billion in U.S. investments will be paid from money that had been overseas, Apple estimated.
Companies who bring back money stashed overseas this year will be taxed at a 15.5 percent rate, below the new 21 percent rate for U.S. corporate profits under the new law. As a whole, corporate America has an estimated $2.6 trillion in overseas cash, with most of that concentrated in the technology industry, with Apple sitting at the top of the heap.
Analysts have been predicting that most of the overseas profits coming back to the U.S. would be plowed into paying shareholder dividends and buying back stock, something that happened the last time a one-time break on offshore profits was offered more than a decade ago.
While Apple is likely to return some of its overseas money to its shareholders, Wednesday's announcement is designed to be a show of faith in the U.S. — the company's largest market. The public show of support to the U.S. also helps the optics of a company that will still continue to make most of its iPhones, iPads and other gadgets in factories located in China and other faraway countries that offer cheaper labor.
"Apple is a success story that could only have happened in America, and we are proud to build on our long history of support for the U.S. economy," Cook said.
Cities from across the U.S. will likely be offering Apple tax breaks and other incentives in an attempt to persuade the company to build its second campus in their towns.
That was what happened last year after Amazon announced it would build a second headquarters -- dubbed “HQ2” -- in North America to expand beyond its current Seattle home. The online retailer received 238 proposals from cities and regions in the U.S., Canada and Mexico. Amazon is expected to announce the winning bid later this year.