As we head towards the start of the fall season, it can only mean one thing: Are you ready to rumble? Yes, that’s right – it’s football season. And many would argue you can’t watch football without a high-quality LCD television.
If you live in Wisconsin, that LCD screen will soon be manufactured near you. Foxconn Technology Group, the world’s largest electronics manufacturing company, announced that it will be investing $10 billion and creating 13,000 new jobs in Wisconsin by locating one of its manufacturing facilities there by 2020.
A $3 billion tax credits package for Foxconn’s investment is currently moving through the legislative process and, despite the company’s intention to create jobs in Wisconsin, opponents worry those jobs will go to workers just across the state line in Illinois, according to Bloomberg BNA’s Alex Ebert.
Meanwhile, Wisconsin has already entered into a $21 million incentives deal with HARIBO, creator of the original gummy bear, in order for the company to build a plant in the state. HARIBO invented gummy bears back in the early 20th century and will be building its first U.S.-based plant in Pleasant Prairie, Wisconsin, reports Bloomberg BNA’s Michael J. Bologna.
Despite the success Wisconsin has achieved in bringing certain companies to the state, critics argue that the money given to these companies should be spent elsewhere such as in education funding, reports WIProud.com. Others worry about the environmental impact that the Foxconn deal would have on the state, according to the PBS NewsHour.
One group that supports continued investment in the state is the Wisconsin Economic Development Corporation (WEDC). The WEDC issued its annual report on qualified new business venture (QNBV) companies September 1. The report discusses how many credits were issued during 2016 for investments in QNBV companies. As part of its early stage business investment program, Wisconsin offers various tax credits, such as angel investor credits and early stage seed investment credits, to certain taxpayers investing in startups and other businesses.
In 2016, the state issued $17.9 million in credits for investments in QNBV companies. Investments in these companies totaled $281.7 million last year whereas, in 2015, the total amount of investment was approximately $176.6 million.
Of the $281.7 million total investments in 2016, approximately $36 million came from angel investors and about $35.6 million came from early stage investors.
The angel investment credit is an income tax credit available for making a bona fide angel investment in a QNBV. A “bona fide angel investment” is a purchase of an equity interest, or any other expenditure, that is made by a person who reviews new businesses or proposed new businesses for potential investment of the person’s money.
The early stage seed investment credit is a nonrefundable credit equal to 25 percent of the taxpayer’s initial investment paid in the taxable year to a certified fund manager who invests the money in a QNBV.
Only time will tell if these and other tax credits offered in Wisconsin are effective in making ‘Wisconn Valley’ the new Silicon Valley of the United States.
Continue the discussion on LinkedIn: How much of a role do tax credits play in a company’s decision to build a facility in a particular state?
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