The City of Cupertino has reached a settlement with California after an audit found it owed the state tens of millions of dollars in misallocated sales tax revenue from Apple. The agreement allows Cupertino to keep the dollars it received between 2021 and August 2024. Beginning in 2025, it will no longer receive the sales tax revenue from Apple.
“This has definitely been really the best outcome that we could have envisioned. It’s been three years (since) this whole thing started, so we’re basically happy with how it went,” Mayor Sheila Mohan told San José Spotlight.
“The settlement provides a reprieve to the city and will keep us balanced for a little bit longer,” added Interim Assistant City Manager Tina Kapoor.
Apple is headquartered in Cupertino. Under an agreement forged in 1998, the company allocates 1% of the state’s 7.25% sales tax to the city. The city returns around one-third to the company.
The 2021 audit found that Apple would need to re-allocate $20 million, and that Cupertino owed $56.5 million. The city set aside some $77.5 million in the 2024-25 budget for repayment, leading to a $15 million deficit.
Cupertino will still need to figure out how to handle the loss of annual revenue after 2025.
Read more at San José Spotlight.