Apple made an aggressive pitch for a corporate tax holiday Monday, stressing that it plans to keep more than $60 billion parked offshore until Congress makes it easier for companies to bring those profits home.
The warning from the nation’s most valuable company came as Apple announced it would pay a dividend to shareholders and buy back stock, moves that will cost about $45 billion over three years.
But Apple — which, like several other Silicon Valley titans, has spent months lobbying for more flexibility to repatriate offshore profits — said it will rely exclusively on domestic cash reserves for the transactions and will not touch the billions in profits held abroad.
"Repatriating the cash from offshore would result in significant tax consequences under current U.S. law," Apple Chief Financial Officer Peter Oppenheimer said on a conference call.
Apple and other backers of a repatriation holiday — including Oracle, Cisco, Microsoft and Google — threw their support last year behind the WIN America Campaign, a lobbying coalition that urged Congress to temporarily reduce the tax rate that U.S. multinationals have to pay on offshore profits.
As it stands, companies have to pay their full corporate rate, as high as 35 percent, on profits made anywhere in the world. The corporations can defer paying those taxes until the profits are brought to the United States, and also receive credits for taxes paid to foreign governments.
Supporters of a tax holiday say that U.S. companies have, according to some estimates, more than $1 trillion held abroad, and that making it easier to repatriate those funds could quickly inject cash into the U.S. economy.
Under repatriation measures introduced in both chambers of Congress, multinationals could potentially pay a tax rate as low as 5.25 percent on offshore profits.
But while those proposals have supporters in both parties, the measures have powerful opponents and have yet to move far in Congress. Skeptics of the holiday point to several reports that have said a previous tax holiday, enacted in 2004, did little to stimulate job creation.
The Obama administration, which released a corporate tax reform framework last month, is among those that feel the last holiday did little to help the economy. Administration officials have for months said they are firmly opposed to a repatriation holiday, and that they would not consider the idea outside of the broader context of tax reform.
“I think generally we're pretty clear that we're opposed to a repatriation holiday, that the evidence with the previous one indicated that lots of the resources were used for stock buyback, dividend payments and so on,” a senior administration official said last month.