Some of Apple’s massive $138 billion overseas cash hoard may come back home, as both Democrats and Republicans from the U.S. Senate said they are considering a one-time “tax holiday,” to lure Apple and other companies to bring cash they’re holding overseas back to the U.S.
Senators hope that a temporary reduction in taxes for bringing money back to the U.S. will replenish the federal Highway Trust Fund for road construction and repairs. The program is set to run out of funds by the end of August, according to Reuters.
Apple could reap the biggest benefit of a U.S. tax holiday, as just $18 billion of the company’s $156 billion cash pile is held domestically. Apple has lobbied numerous times for just such a tax break that would be incentive to bring some of its foreign profits back into the country. Currently, companies face a 35% tax rate on profits made outside the country.
The last tax holiday in the U.S. occurred back in 2004, when corporations were allowed to repatriate foreign profits at a tax rate of 5.25%.
While a tax holiday would likely be attractive to Apple, the company has also been pushing for more comprehensive tax reform that company executives say would be beneficial for the U.S. economy. Apple has asked for corporate tax reform that includes four key points:
- Be revenue neutral
- Eliminate all corporate tax expenditures
- Lower corporate income taxes
- Implement a reasonable tax on foreign earnings that would allow free movement of capital back to the U.S.
Apple, the largest corporate taxpayer in the U.S., paid $7 billion to the U.S. Treasury in 2013.