A tax agreement between Apple Inc. and its hometown of Cupertino, California, has come under scrutiny from state regulators, potentially slashing the amount of money that the company sends to the city.
The California Department of Tax and Fee Administration launched an audit of the arrangement in 2021, and Cupertino’s finance director is scheduled to explain the findings to the city council on Thursday. The upshot for Cupertino is that local tax revenues are expected to fall 73% this year.
Although Apple isn’t named in the city staff report, the company is Cupertino’s largest source of sales tax revenue. According to the audit, revenue will drop to $11.4 million in the current fiscal year from $42.1 million, and Cupertino may be required to return money to the state that it has received in previous years.
To cover the shortfall, the city may have to cut staff and other spending. If this is a topic of interest to you, then check out the full Bloomberg Tax report here for further details.