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Foxconn not expected to receive state tax credits over next 3 years
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FOXCONN

Foxconn not expected to receive state tax credits over next 3 years

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State officials do not anticipate Foxconn Technology Group’s manufacturing project will be eligible for state tax credits over the next three fiscal years, as discussions over the state’s contract with the company continue.

Based on the Taiwan-based company’s activities in 2018 and 2019, Foxconn’s ineligibility for state funds “will likely continue, as the company also does not appear to be on track for credit eligibility based on its calendar year 2020 activities,” the state Department of Administration reported.

The projection is included in DOA’s budget requests and revenue projections for fiscal years 2022 and 2023. In the report, the Wisconsin Economic Development Corp. assumes that the state will not make any payments to the company through June 30, 2023.

If Foxconn had met the necessary job creation and capital investment requirements laid out in the original contract, the company would receive up to about $600 million in refundable state tax credits by the end of the 2023 calendar year. While Foxconn has yet to receive any state dollars, the project in Mount Pleasant already has cost the state nearly $237 million in state and local road improvements, sales and use tax exemptions, grants to local governments and for worker training and employment.

On Oct. 12, WEDC told Foxconn it had been denied job creation and capital investment tax credits until the company and the state draw up a new contract. The company was told late last year it would not receive subsidies until a new agreement was reached.

Foxconn challenged WEDC’s decision later that month, and a department spokesperson said this week the state and company continue to communicate about the project, but WEDC does not comment on specific discussions with companies until a resolution has been reached.

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While Foxconn has claimed to have created more than 800 jobs in 2019, above the 520 minimum needed for state subsidies, WEDC verified only 281 of those jobs.

Regardless of how many jobs Foxconn has created at the southeast Wisconsin facility, state officials have said tax subsidies agreed to in the original contract are tied to jobs and capital investment for specific projects, which Foxconn is failing to deliver.

Foxconn’s contract calls for a so-called Generation 10.5 facility that would build larger panels for TV screens, but the project has downsized to Generation 6, which would manufacture small screens for mobile phones, tablets, notebooks and wearable devices.

Under the contract, signed in 2017 by former Gov. Scott Walker, Foxconn would earn incentives totaling as much as $2.8 billion in state credits over 15 years if the company reached the 13,000-employee benchmark and made a $10 billion capital investment in the state.

State and Foxconn officials have been discussing possible amendments to the existing contract, but so far an agreement has not been reached.

The company said late last year it intended to have its manufacturing facility up and running by the end of 2020, but company officials have not said in recent months if that is still the case. Foxconn did not respond to a request for comment.

Keep up with the latest news on Foxconn in Wisconsin

Read more news coverage of Taiwanese electronics manufacturer Foxconn's decision to build a massive plant in Wisconsin.

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Taiwanese electronics manufacturer Foxconn could use its Wisconsin factory to build ventilators needed to treat COVID-19 patients, according to the CEO of a medical hardware company that designs and makes ventilators.

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