Apple to build Macs in low-tax Texas

CEO Tim Cook reveals location of $100M investment for 'Made in the U.S.A.' Macs

Apple will build Macs in Texas using some parts made in the U.S., CEO Tim Cook said Tuesday, putting a little flesh on a pledge from last December.

In a prepared statement Cook read before a Senate subcommittee yesterday, the chief executive named Texas as the location of a new factory where Apple will assemble Macs.

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Cook was in Washington, D.C. to defend Apple's tax practices after senators accused the California company of dodging its obligations by shunting profits to overseas subsidiaries, including several in Ireland, one of which has allegedly paid no income taxes for five years.

"We're investing $100 million to build a Mac product line here in the U.S.," said Cook, repeating comments made last December in interviews with NBC and BusinessWeek. "The product will be assembled in Texas, include components made in Illinois and Florida, and rely on equipment produced in Kentucky and Michigan."

Cook's naming of Texas and the other states was part of a litany of Apple's U.S. job creation history. Cook did not elaborate on the facility, when it will come online or what Mac the plant will assemble.

However, in an interview earlier this week with Politico -- part of his D.C. media blitz before Tuesday's hearing -- Cook said that the U.S. factory will begin churning out a new version of a current Mac later this year.

Cook also told the influential blog that components for the new Mac would come from suppliers in Arizona, Texas, Illinois, Florida, and Kentucky.

Apple already relies on iPhone and iPad components made in Texas, and iPhone glass from Kentucky, Cook said in the prepared statement.

Texas is a natural for Apple. The company already has a large presence in the Lone Star State's capital of Austin, and recently broke ground there on a multi-phase project that will add one million square-feet of office space to an existing campus. The expansion, scheduled for completion in 2021, will cost an estimated $304 million and add 3,600 jobs to Apple's Texas workforce.

Texas also has no corporate income tax, although it does collect a gross receipts tax, called a "franchise tax" by the state. According to the Tax Foundation, a tax policy think tank, Texas was rated No. 38 in 2013 for its corporate tax rate, part of the organization's overall rating of the most business-friendly states. (In its rankings, the Tax Foundation uses lower numbers to represent states with a lower tax burden on businesses). California, where Apple is headquartered, was ranked No. 45 in the same category.

The Tax Foundation's overall tally for Texas -- which also includes rankings for individuals' income tax, sales tax, property tax and unemployment tax -- was No. 9. Meanwhile, California's overall ranking was No. 48.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, or subscribe to Gregg's RSS feed . His email address is gkeizer@ix.netcom.com.

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This story, "Apple to build Macs in low-tax Texas" was originally published by Computerworld .

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