Documents show Apple's tax-break quest for NC site

Agency e-mails indicate the courtship with the Cupertino, Calif.-based technology giant was under way by last September. Legislators decided late last month to change the way the North Carolina would calculate Apple's corporate tax bill, saving the company about $46 million on its state taxes over the next decade.

Though Apple announced it picked North Carolina for its East Coast data center early this month, it is still weighing locations in Catawba and Cleveland counties and has not announced a final site decision. Both counties are about 30 miles west of Charlotte and each has unemployment rates of more than 15 percent. Documents on Apple's recruitment released by the state Commerce Department were edited to hide clues of locations the company is considering.

North Carolina lawmakers changed the way the state calculates corporate taxes to benefit Apple because it is expected to have a relatively large share of its nationwide property and payroll in the North Carolina, but a small share of U.S. sales in the state. Virginia was among a number of states that similarly structured its corporate tax calculation, the documents said.

A March 28 e-mail from Commerce Department Deputy Secretary Dale Carroll to others inside the agency, the Revenue Department and the governor's office described why legislators would later change the rules.

"The company informed (Commerce Department recruiter Peggy Anderson) and me they are stepping things up with the State of Virginia and will revisit there on Monday and Tuesday. They have requested a letter from us summarizing why apportionment is not possible in NC for their business related to this project," Carroll wrote.

Legislation that changed North Carolina's corporate tax apportionment formula was unveiled publicly on May 6.

Sen. David Hoyle, D-Gaston, was perhaps the Legislature's leading advocate for the tax change to benefit Apple though the project was only projected to create about 50 full-time jobs. He said Thursday Apple representatives said that if the company's experience in North Carolina went well, it could later open a call center employing several hundred workers.

"That was not a promise or commitment, but it was dangled out there as possibility that I had to look very seriously at," Hoyle said.

Apple spokeswoman Susan Lundgren had no comment on when the company would announce its North Carolina location. She did not immediately respond to a later call seeking comment on Hoyle's comments.

Apple has not described how it would employ its data center -- a vast collection of servers able to process tremendous amounts of data traffic. The maker of Macintosh computers, iPods and iPhones could use the new center to add capacity to store and move music, video and movies purchased through its popular iTunes Web site, which offers 10 million songs. Apple also offers applications for the iPhone and its MobileMe service, which allows a user to synchronize desktop computers with other personal data devices.

The site will be the company's East Coast operations center "with this facility taking advantage of 3 hour time change on the East Coast to facilitate communications between European operations/sales and California for data transmission," an undated document in the state's recruiting file said.