Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
The Wisconsin Legislature will begin debating an unprecedented business development bill Aug. 1 designed to provide Foxconn Technology Group $3 billion in tax benefits over 15 years.
Gov. Scott Walker (R) July 28 called for a special legislative session just two days after Foxconn, the world’s largest contract electronics manufacturer, announced its plan to build a 20 million-square-foot campus in southeastern Wisconsin for the production of liquid crystal display panels for televisions and electronic devices. The company expects to invest $10 billion in the project and to hire thousands of direct employees.
Walker called for quick legislative action and bipartisan support, saying the high-tech “Wisconn Valley” campus would also generate thousands of indirect jobs.
“I am encouraged by the bipartisan support we have seen for Wisconn Valley, and I call on the Legislature to support this measure and open the door for 13,000 direct Foxconn jobs, 10,000 direct construction jobs, and 22,000 more indirect or induced jobs related to this project,” Walker said in a statement. “This is good for our entire state.”
Walker released draft legislation ( Legislative Reference Bureau-4050/1) authorizing the Wisconsin Economic Development Corporation (WDEC) to create a single “electronics and information technology manufacturing zone.”
The bill directs WEDC to authorize up to $2.85 billion in income and franchise tax credits to a business operating in the manufacturing zone, presumably Foxconn. The manufacturer, however, would have to meet certain investment and job-creation targets to qualify for tax benefits. Generally, Foxconn would be eligible to earn tax credits equal to 17 percent of wages paid or 15 percent of capital invested over 15 years.
The state could also claw back benefits if Foxconn supplies false information to obtain credits, leaves the zone to conduct the same business activity, or ceases operations.
The bill permits a $150 million sales and use tax exemption on purchases of building materials, supplies, and equipment used for the campus construction project.
The proposed law establishes special rules for the operation of a tax incremental financing district (TID) linked to the manufacturing zone. The municipality establishing the TID could use the district to pay for certain improvements required by Foxconn, and the investment period would extend for 30 years, rather than 20 years under current law.
In addition, the bill loosens a series of environmental and public service requirements that would normally apply to a project of this complexity and size. It also permits the state to provide grants to municipalities for certain costs associated with the development of the manufacturing zone.
Assembly Minority Leader Peter Barca (D) expressed general support for the Foxconn project and the legislative process requested by Walker. At the same time, he said lawmakers will need time to question company officials, discuss the project with local units of government, and consider a wide range of potential community and environmental impacts.
“There are still many unanswered questions that I hope will be answered in the upcoming public hearing,” Barca said in a statement. “There should also be time following the hearing but before a vote is held to address any issues that might arise. Wisconsin residents, local officials and taxpayers need time to consider this sizeable investment.”
To contact the reporter on this story: Michael J. Bologna in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Jennifer McLoughlin at email@example.com
Text of L.R.B. 4050/1 is at http://src.bna.com/rfU.
Copyright © 2017 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)