What Apple hasn’t told Americans, though, is that an intricate financial set up utilizing low-tax states in the U.S. and offshore tax havens has allowed it to skirt billions of dollars in American taxes over the last decade. By setting up financial offices in states like Nevada — which has no income tax — and routing other profits through Ireland, Luxembourg, and nations in the Caribbean, Apple avoided an estimated $2.4 billion in American taxes in 2011 alone, the New York Times reports:
Apple’s headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company’s profits, Apple sidesteps state income taxes on some of those gains.
California’s corporate tax rate is 8.84 percent. Nevada’s? Zero. [...]
Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. [...]
Without such tactics, Apple’s federal tax bill in the United States most likely would have been $2.4 billion higher last year, according to a recent study by a former Treasury Department economist, Martin A. Sullivan.