Solar-Based Manufacturing: Is Apple Driving a New Wave of Innovation?

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When Apple announced its plans to bring a 100% renewable energy powered manufacturing plant to Arizona, we would do well to ask why?

The answer is partly to be found in the map below:

solarUS_small.jpg

What else? 

1) Proximity to Mexico

There's a Foxconn manufacturing base in Juarez - just over the Mexican border - and it seems like the output from the Arizona plant will end up there. 

2) Tax Structure

Over the past 15 years Arizona has demonstrated a "pro-business" mentality combined with a minimalist regulatory approach by reducing taxes and decreasing regulations:

  • No corporate franchise of business inventory tax
  • Low workman's comp and unemployment insurance rates
  • No income tax on dividends from out-of-state subsidiaries
  • 80% sales factor on corporate income tax scaling to 100% option
  • No worldwide unitary tax
  • Aggressive depreciation schedule
  • 90 day or less permitting
  • Virtually all services exempt from sales tax
  • No inventory tax
  • No Sales tax on manufacturing equipment
  • Ability to carry forward 100% of net operating income for twenty consecutive years
  • Small businesses with less than $10 million in assets will not be required to pay capital gains taxes beginning in July 2015
  • Right to Work State

Arizona also has aggressive tax credits to reduce state corporate income tax liability. This includes phasing in a corporate income tax rate from 6.9% in 2012 to 4.9% in 2017.

So what does this mean for neighboring states?

It's too early to call this is a new wave of innovation, but it's worth thinking about. How can states like California, Texas, and New Mexico join this solar-shift?  Do they even want to? 

C'mon, New Mexico!

Apple is to be applauded for bringing manufacturing back to the US. More importantly, they can still think different.

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This page contains a single entry by Christian Sarkar published on November 5, 2013 7:16 AM.

Hybrid Business Models: Impact Innovation and the Quest for Collaborative Profit was the previous entry in this blog.

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