San Jose

Cupertino Leaders Table ‘Apple Tax' Issue

The Cupertino City Council voted 4-0 Tuesday night to table the issue of a so-called head tax that would have cost Apple millions. If they had voted yes on the issue, it would have been decided by voters on the November ballot.

But the council members agreed to defer the idea until they sit down with Apple and other business leaders to discuss other solutions. If nothing works, the issue could be sent to voters in 2020. 

The proposed head tax was introduced to help pay for traffic projects. Companies with more than 5,000 employees would have to pay an additional $425 per employee each year. Apple is the only company of that size in Cupertino and would have had to pay an estimated $9.4 million. That number is based on the city’s estimate that the tech giant has 24,000 employees in the city limits.

City staff has said the money would be used to ease traffic congestion but offered no specific plans.

The idea was met with strong opposition from the business community at Tuesday night’s council meeting.

"[Apple] doesn’t have to hire and expand in Cupertino. They could hire and expand in Texas, or overseas,” said Matthew Mahood, the President and CEO of the Silicon Valley Organization. “Or in Apple’s case, less than 10 miles away in the city of San Jose, where they own 87 acres and are entitled to build 4.4 million square feet of new office space.”

Apple’s Director of State and Local Government Affairs, Michael Foulkes, also addressed the council.

“We stand ready to work with the city and with all of you on transportation issues. It's an issue that affects all of us,” he said.

To further convince the city, Apple Vice President Kristina Raspe sent a letter to the council Monday night. It begins, “for more than 40 years, Apple has been proud to call Cupertino our home.”

She writes the company worked hard to secure enough land to build its new campus in the city, adding Apple invested more than $70 million on public benefits on that project alone.

The letter also states in part, “As you know, Apple’s investment in Cupertino goes far beyond that.”

Councilwoman Savita Vaidhyanathan says she was especially touched by the letter, and the fact Raspe mentioned partnering to find solutions on Highway 85 and Stevens Creek Boulevard.

“[Apple] actually mentioned that in their letter … it was a huge game changer for us,” Vaidhyanathan said.

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