Cupertino this week greenlit a $12.1 million payment to Apple to pay back sales tax revenue the city had collected from the tech giant in the last two years.
The City Council approved the item without discussion during their Tuesday meeting. City documents show the transaction occurred on March 6. The amount is an accumulation of how much the city received in sales tax from Apple between January 2023 and June 2024.
The city did not respond for a request to comment from this news organization.
The money was pulled from the city’s general fund, an account that supports most of the city’s activities and is funded through taxes.
Since 1998, Apple has treated all online purchases of products within California as if they were made in the city. The deal allowed Cupertino to collect 1% of Apple’s 7.25% sales tax, and a third of the revenue was returned to the company.
But in 2023, the California Department of Tax and Fee Administration (CDTFA) audited the city and determined the state should receive that revenue instead and the city needed to pay back any previously collected sales tax dollars.
Cupertino had prepared to set aside $56.6 million from its budget to pay back the amount, leading to monetary reductions in staff, community services and city projects.
A settlement reached last year with the CDTFA allowed Cupertino to keep the roughly $74.5 million in Apple sales tax revenue it had collected.