What Should Apple, Google, Microsoft Do With Billions Parked Abroad?

NEW YORK (The Street) -- Technology companies account for almost half the cash held overseas by U.S. companies, according to a new report by Moody's Investor Services, holding 49%, or $540 billion, of the total.

Four companies -- Apple (AAPL), Google (GOOG), Microsoft (MSFT), and Cisco - have parked $369 billion (or, approximately 86%) of their cash reserves overseas. That was up from $308 billion, or 82%, in 2013. Along with Pfizer, the top five companies accounted for 25% ($439 billion) of the total cash balance in the list.

The report, which examines cash positions for U.S.-based publicly listed companies, says overseas cash reserves for companies will continue to grow unless tax laws are changed to encourage companies to repatriate money. Companies currently pay 35% tax to repatriate overseas earnings back home. President Barack Obama proposed to shave off more than half of that rate to a one-time 14% levy and a 19% tax on future profits in a plan unveiled in February.

According to estimates, Apple, which has $158 billion parked overseas, would end up paying $10 billion in taxes, if the plan was passed. Since this is a bipartisan issue with both major parties at opposite ends of the spectrum, there is little chance of the plan passing in the near future.

Meanwhile, tech companies have limited options for putting their overseas cash to work. Domestic cash reserves can be used to pay out dividends or initiate share buybacks.

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