For U.S. Companies, Money ‘Offshore’ Means Manhattan

By DAVID KOCIENIEWSKI, NYT

Like some of the nation’s prominent chief executives, Apple’s Timothy D. Cook has a simple proposal to help spur the economy and encourage corporate tax compliance: give American companies a tax break to bring to the United States untaxed profits parked overseas.

But much of that money is already home.

Multinationals based in the United States now hold more than $1.6 trillion in cash classified as “permanently invested overseas.” These funds will face the 35 percent federal corporate tax only if it is returned to the country.

In the convoluted world of corporate tax accounting however, simple concepts like “overseas” and “returned to the country” are not as simple as they appear.

Apple’s $102 billion in offshore profits is actually managed by one of its wholly owned subsidiaries in Reno, Nev., according to the Senate report on the company’s tax avoidance. The money is tracked by Apple company bookkeepers in Austin, Tex. What’s more, the funds are held in bank accounts in New York.

(More here.)