From Phoenex Business Journal

Apple puts more money in foreign tax havens than any other major U.S. corporation, according to a new report.

Big U.S. and Arizona companies — such as Apple, American Express, JPMorgan Chase & Co. and Intel — park more than $1.9 trillion in foreign tax havens such as Bermuda, Luxembourg and the Cayman Islands avoiding $90 billion in federal taxes annually, according to a new report from Arizona and national watchdogs.

In the Phoenix area, local companies and large employers such as Avnet Inc., Insight Enterprises, Bank of America, American Airlines and Honeywell International are among the big U.S. companies who have set up more than 7,800 subsidiaries in markets with favorable tax climates.

The Arizona Public Interest Research Group and Citizens for Tax Justice looked at Fortune 500 companies and where they move their money to in order to avoid U.S taxes.

“Our tax code makes it too easy for American multinationals to dodge taxes by setting up shell companies in tax havens, which hurts Arizona taxpayers,” said Dan Smith, Arizona PIRG’s Tax and Budget Advocate.

Smith said offshore tax loopholes used by U.S. corporations cost Arizona $286 million in state tax revenue every year.

Apple — which has a new manufacturing plant in Mesa — stashes more money offshore than any other big U.S. company, according to the PIRG report. Apple has $111.3 billion parked in an Irish subsidiary where it pays a 2 percent tax rate.

The U.S. corporate income tax rate is 39 percent. Google Inc., Yahoo Inc., General Electric and Microsoft also park money in Ireland, according to the study.

Intel Corp. — which has a semiconductor fabrication campus in Chandler — has $20 billion in Costa Rica, Hong Kong and the Cayman Islands.

Apple and Intel are among the Arizona businesses who pay lower property taxes than other companies because they are located in special Foreign Trade Zones.

Phoenix-based Avnet has 50 foreign subsidiaries including ones in Macao and the British Virgin Islands. Their holdings total $2.7 billion, according to the PIRG report.

Tempe-based Insight Enterprises has 10 foreign subsidiaries in places such as Singapore with $72 million in holdings. Insight officials did not respond to a request for comment.

Other major Valley employers, such as Honeywell International, American Express, Amazon.com and American Airlines also have subsidiaries set up places such as Switzerland, Bahrain and Singapore.

An American Airlines spokesman declined comment.

The three largest banks in Arizona and the U.S. — Chase, Bank of America and Wells Fargo — also have money in places like the Bahamas, Hong Kong and Gibraltar.

Bank of America has 264 subsidiaries in foreign markets paying 10 percent in taxes on $17 billion, according to the report

Notable companies with money in foreign tax havens

McDonald’s

Boeing

Disney

General Electric

Johnson & Johnson

IBM

Medtronic

General Motors

Marriott International

Starbucks

Source: Arizona PiRG

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