Council renews tax-sharing deal with Insight to retain jobs and sales tax revenue

The Cupertino City Council unanimously approved a new economic development sales tax-sharing agreement with Insight on July 13, a continuation of a partnership first established in 2006 to retain the company's operations and sales-tax activity in the city.

Finance Director Jonathan Orozco told the council the proposed agreement would run through June 30, 2029, with options for up to eight one-year extensions subject to council approval. Staff projected the agreement would associate about $2.4 million in annual sales tax activity with Insight's local operations, of which roughly $1.14 million would be retained by the city and about $1.0 million would be rebated to Insight under the rebate structure staff described. Over the initial three-year term, staff estimated approximately $7.2 million in gross sales tax revenue and about $4.2 million retained by the city.

Orozco said the draft agreement includes updated reporting requirements and provisions to ensure Insight cooperates with California Department of Tax and Fee Administration (CDTFA) reporting requirements. The staff report also included the government-code-required economic development subsidy report (attachment B) under Government Code section 53083, which summarizes the public purpose and fiscal impacts of the subsidy.

Rachel Crump, Insight's chief accounting officer, provided an overview of Insight's business and said the company values its Cupertino presence. Council members emphasized retaining local employers and thanked staff for the outreach. After the public hearing required by law, the council adopted the resolution and authorized the city manager to execute the agreement.

What council approved: adoption of the economic development subsidy report and authorization for the city manager to execute the sales tax-sharing agreement with Insight. Staff said they will return to council as required if parties seek to extend the agreement.