Apple on Wednesday said it plans to repatriate an unspecified amount of its overseas cash as part of what it is calling a five-year, $350 billion contribution to the U.S. economy.
Apple's offshore cash reserve stands at just over $250 billion, based on the company's Form 10-K filing for the fiscal year which ended September 30.
The company on Wednesday did not say how much of those funds would be repatriated but said it expects to pay about $38 billion in U.S. taxes on the repatriated funds stemming from the recently-enacted change in the U.S. tax law.
Apple is joining a growing list of U.S. tech giants looking at how to handle their large amounts of cash generated by overseas sales. By U.S. law, profits on international sales by U.S. companies are taxed both in the country where those sales were made, as well as at the U.S. rate when those profits are repatriated.
However, changes in the law exempts U.S. corporations from most taxes on foreign profits going forward, and specifies that companies pay a one-time mandatory tax of 15.5 percent on cash and cash equivalents on profits currently held overseas, according to Reuters.
Apple's plans to repatriate overseas cash follow the 2017 charges by the European Union that Apple owed 13 billion Euro ($15.4 billion) in back taxes because of an alleged unfair tax deal in Ireland.
The EU took Ireland to court over the dispute in October. In December, Apple agreed to pay the disputed amount into an escrow account while it appealed the case in court. In an interview with the Irish Independent newspaper in September, Apple CEO Tim Cook called the dispute "total political crap."
Companies like AT&T and Comcast have already pledged that any tax savings from changes in the U.S. tax laws that would decrease the tax rate on overseas profits would go towards business investments and employee benefits.
For Apple's part, the company said that its estimated $38 billion tax payment, combined with other planned capital expenditures and investments in U.S. manufacturing, will amount to about $75 billion of an estimated $350 billion the company said it will contributed to the U.S. economy over the next five years.
That $350 billion also includes other investments and spending with domestic suppliers and manufacturers. That is in addition to on-going tax payments as well as taxes generated by employees' wages and Apple product sales.
With the investment, Apple said it expects to create about 20,000 new jobs at the company over the next five years above the 84,000 people it currently employs across the U.S.
The company also plans to invest $30 billion in capital expenditures in the U.S., including establishing a new Apple campus to initially house customer technical support operations. That figure also includes about $10 billion in investments in data centers across the country.
However, Apple did not specify how much of that $30 billion was previously planned and how much will come as a result of the repatriation of its overseas cash.
Apple, which last year unveiled its Advanced Manufacturing Fund for supporting innovation efforts both of U.S. companies and foreign companies investing in the U.S., plans increase that fund to $5 billion from its previous $1 billion commitment. However, the company did not specify how much of that increase was a result of the repatriation of overseas funds and how much was previously planned.
Apple did not respond to a request for comment.
Kelly Ireland, CEO of CB Technologies, an Orange, Calif.-based solution provider, told CRN that it is no surprise to see companies like Apple committing to investing overseas cash holdings in the U.S. as a result of the recent tax changes.
"At last year's BoB Conference, The Channel Company [Chairman] Robert Faletra asked [Hewlett Packard Enterprise CEO] Meg Whitman how much her company would bring back to the U.S., and she answered right away, '$8 billion,'" Ireland said. "We see moves like this as a big help to the economy."
The Best of Breed (BoB) Conference and CRN are both part of The Channel Company.
Ireland said that amount a company like Apple repatriates to the U.S. is not as important as the fact that that money comes to the U.S. "It's the action that counts," she said. "It shows what corporate America will do. I hope to see this replicated across the entire U.S."
Apple CEO Tim Cook said in a prepared statement that his company has a long history of supporting the U.S. economy.
"We believe deeply in the power of American ingenuity, and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness. We have a deep sense of responsibility to give back to our country and the people who help make our success possible," Cook said in that statement.
Richard Whiting contributed to this article.