Apple wins $920K tax refund from 1989

The San Francisco Chronicle reports that California's Supreme Court has affirmed a $920,000 tax refund for Apple dating back to 1989, but it refused to hear the company's request to lower its tax bill for income earned abroad. The court upheld an appellate ruling earlier this week that returned $231,000 in taxes to Apple, along with $689,000 in interest.

However, it is only a partial win, as the Supreme Court rejected Apple's request to reevaluate tax rates on foreign-earned income. "Apple argued that its foreign dividends from that year should be attributed to income from previous years that had already been taxed," the report read.

Apple's lawyer warned the decision could have expensive ramifications in the future. "It creates some potential issues for companies that want to repatriate earnings from overseas," Jeffrey Vesely told the publication on Thursday. The issue of overseas earnings has reached "heightened importance during our current economic climate, as it affects the ability of United States companies to bring billions of dollars of foreign earnings back into the United States economy," the California Taxpayers Association told the court. Two-thirds of Apple's cash hoard, which reached $81 billion in the September 2010 quarter, is located offshore.

As the portion of Apple's income that it earns outside of the U.S. has surpassed its domestic earnings, the company has taken to lobbying for a tax holiday that would allow it to repatriate its cash with a reduced tax load. A consortium of companies, which includes Apple, has proposed a one-year break that would let companies pay just 5 percent to bring their money home, rather than the 35 percent tax rate they currently face.