Apple announces $1b Reno datacentre expansion

Five years after building out its datacentre in Reno, Nevada, Apple has said it will construct a $1 billion expansion that will provide 100 new jobs in the region, also buying a downtown lot for a new shipping facility.

See inside a Microsoft cloud datacenter

Apple has announced that it will be building out a $1 billion datacentre expansion in Reno, Nevada, which will provide an additional 100 jobs within the datacentre once complete, as well as 300 temporary construction-based jobs.

Apple had first flagged significant expansion plans for its Reno datacentre back in 2014, at the time applying for permits to build additional wings of the original $1 billion datacentre it built in 2012.

"We're excited to be increasing our contributions to the local economy with an additional $1 billion investment to expand our datacentre and supporting facilities," Apple spokesperson John Rosenstock said on Wednesday.

"As part of our growth, we plan to hire 100 employees and expect construction will support an additional 300 jobs."

Apple had last week announced its new $1 billion fund aimed at creating additional manufacturing jobs across the United States. Apple CEO Tim Cook gave no specifics of jobs at the time, simply saying he hoped Apple's billion-dollar "advanced manufacturing fund" would create new jobs.

However, these jobs may not be with Apple; Cook said that Apple has "talked to a company we're going to invest in already".

This could include Apple's major iPhone manufacturer Foxconn, which is currently in talks with the United States government on a major expansion there following a two-day visit by Foxconn president Terry Gou to the White House earlier this month.

Gou told the media that his company plans to make a "capital intensive investment" in the US market.

"We are planning a series of investments in America. This project will include capital intensive investment and skilled labour and high technology," Gou said.

After it began talks to expand into the US last year, Foxconn said in late January that if its customers including Apple cooperate, it could make investments in the US worth more than $7 billion.

Its manufacturing facilities in China employ more than 1 million people, with Apple making up approximately half of Foxconn's revenue.

In January, Apple also unveiled plans to build a 200-megawatt solar plant in Nevada in partnership with NV Energy, saying it aims to power its entire Reno Technology Park datacentre using the renewable energy plant.

The Reno solar farm is expected to begin operating in 2019.

Reno City Council has now also given the go-ahead for Apple's proposal to construct a $4 million shipping and receiving warehouse on a vacant lot in downtown Reno, approving Apple's purchase of the lot in a six-to-one vote on Wednesday.

"Council approved ... Apple Inc to purchase approximately half a city block of land to construct a 30,000-square-foot purchasing and receiving facility," the Council said.

Apple's lot is located on Evans Avenue between 5th and 6th Streets.

"The acquisition of the Apple facility will provide economic and fiscal benefits to the City of Reno and Washoe County, Nevada, and will serve as a catalyst to attracting other tenants, people, businesses and economic activity to the district," the Council added in its decision.

The purchase of the lot will additionally make Apple eligible for millions of dollars in tax breaks, Reno City Council said.

"[Apple's] agreement to locate the Apple facility in the district was contingent on [Apple] receiving the reimbursement from the developer for an amount equal to a portion of sales and use taxes associated with taxable transactions of [Apple] within the district, including purchases of tangible personal property, such as computer servers and other equipment," the Council said.

"Developer conditionally agreed to reimburse [Apple] the amount of 75 percent of the 2 percent sales or use tax imposed upon and paid by [Apple] under Chapter 372 of the Nevada Revised Statutes minus the amount of the collection cost computed in the manner provided by NRS 271A.070(1)(c)(1) for [Apple's] taxable transactions within the district."

The iPhone giant was similarly awarded around $89 million in state property and sales tax abatements when it initially committed to building the Reno datacentre back in 2012.

While it gains tax rebates in the US, Apple's global tax practices have previously come under fire; earlier this year, it was reported that Apple NZ had paid no taxes in New Zealand for the last 10 years despite making sales worth around $4.2 billion, instead paying the amount due to the Australian Taxation Office (ATO) -- which itself has been cracking down on Apple Australia's tax avoidance.

Having been audited by the ATO, Apple accordingly upped the amount of tax it paid in Australia during 2014-15, paying AU$146 million in tax -- more than double the AU$72 million it paid a year earlier -- under Australia's new multinational tax anti-avoidance laws.

Japanese authorities similarly forced Apple to pay 12 billion yen ($118 million) in back taxes last year after discovering that it was sending a portion of its iTunes profit to a business unit in Ireland without paying taxes on the international transaction during 2014 and 2015.

Apple has been using Ireland's lax taxation laws to avoid paying up for some time, with the European Commission ruling in August after a two-year investigation that Ireland should claim €13 billion in "illegal tax benefits" back from Apple.

Ireland will appeal the decision.

Apple last week reported its second-quarter financial results, posting revenue of $52.9 billion, up from the previous year's $50.6 billion.

For the third quarter of FY17, Apple said it expects to bring in revenue of between $43.5 billion and $45.5 billion.

With AAP