Williamson County homeowners to pay 1.3 times the tax rate offered to Apple

A typical homeowner in Williamson County will shoulder a higher tax rate than Apple Inc., following a vote yesterday by Williamson County Commissioners to offer the company a 65 percent rebate on property taxes for up to 15 years.

Apple plans to build a new 133-acre campus on an undeveloped tract of Robinson Ranch, located in a corner of Austin that lies within Williamson County. The site is less than a mile from Apple’s existing 38-acre campus in Travis County.

Tax jurisdictions covering the new property include the City of Austin, Williamson County, Round Rock ISD, Upper Brushy Creek WCID, Williamson County Emergency District 1, and Austin Community College.

Of these, only Williamson County is known to have offered a tax incentive, while the governor’s Texas Enterprise Fund has also offered a grant of $25 million, equivalent to about $1.7 million per year over the 15-year period.

These incentives mean that typical homeowners will be paying a higher effective property tax rate than Apple for many years to come. For example, a homeowner in Williamson County whose home is appraised at $200,000, situated in the same tax jurisdictions as Apple, would pay a combined property tax bill of $4,423, equivalent to a tax rate of 2.21%, including homestead exemptions.

Apple, by comparison, would pay an effective rate of only about 1.7% on the property, assuming an appraised value of $400 million, which is the minimum amount the company has committed to invest in the property under an agreement with the county. In other words, the homeowner will pay 1.3 times the rate paid by Apple.

In gross terms, the value of the Williamson County tax incentive package can’t yet be estimated with any certainty. It will depend on the future appraised value of the new Apple campus. Williamson County officials used a $1 billion valuation in estimating local tax revenue from the completed campus, but only a $400 million valuation when explaining to journalists the total size of the incentive package.

In their agreement, the county and the company agreed that the minimum taxable value of the 133-acre property will be $50 million throughout the 15-year term of the deal. However, this minimum should be easily exceeded once construction begins.

Apple’s existing campus is valued at more than ten times that amount – $535 million – according to records kept by the Travis County Appraisal District – and the new campus is expected to be larger both in terms of size and employees.

The biggest beneficiary of tax revenues from the new campus will be the Round Rock public school district, whose property tax rate is 1.3 percent.

Apple must create at least 4,000 jobs in order to qualify for the economic incentives offered by the county and the Texas Enterprise Fund. In a statement, Apple said its new campus “will initially accommodate 5,000 additional employees, with the capacity to grow to 15,000, and is expected to make Apple the largest private employer in Austin.”

The statement adds, “Jobs created at the new campus will include a broad range of functions including engineering, R&D, operations, finance, sales and customer support.”