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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,...
Gov. Scott Walker (R) signed tax credit legislation Sept. 18 that will bring a $10 billion Foxconn Technology Group manufacturing campus to Wisconsin, calling the development a “transformational step” for his state.
Walker signed Special Session A.B. 1, granting $3 billion in tax credits, exemptions, and subsidies to Foxconn for its plan to construct a 20 million-square-foot campus in southeastern Wisconsin. Foxconn plans to produce liquid crystal display panels for televisions and electronic devices. The company plans to spend $10 billion on the project and promises to create up to 13,000 jobs.
“This is a truly transformational step for our state, our people, and our economy, and Wisconsin is ready,” Walker said in a statement. “Through Foxconn’s historic $10 billion investment and the creation of 13,000 new family-supporting jobs, the most high-tech, cutting edge technology in the world will be made in America, right here in Wisconsin.”
Foxconn is the operating arm of Taiwan-based Hon Hai Precision Industry Co.
A.B. 1 authorizes the Wisconsin Economic Development Corporation to issue up to $2.85 billion in income and franchise tax credits to Foxconn. Foxconn would have to meet certain job-creation and investment targets to claim the credits. The legislation also permits a $150 million sales and use tax exemption on purchases of building materials, supplies, and equipment used for the construction project.
Democratic lawmakers released a statement questioning the wisdom of the Foxconn special legislation. The group called the bill “the most costly state-funded tax credit package ever offered to a foreign corporation in U.S. history.”
A legislative report previously estimated that Wisconsin wouldn’t reach a “break-even point” in terms of state tax dollars until 2043. At that point, Wisconsin would begin to see positive tax collections from the project of $115 million per year.
“Giving $3 billion to a foreign corporation with a terrible record of keeping its promises is a political stunt that will harm Wisconsin for a generation,” said Sen. Mark Miller (D), chair of the Senate Democratic Caucus.
To contact the reporter on this story: Michael J. Bologna in Chicago at mbologna@bna.com
To contact the editor responsible for this story: Jennifer McLoughlin at jmcloughlin@bna.com
Text of special session A.B. 1 is at http://src.bna.com/sEl.
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