Wisconsin’s economic development agency has determined that Madison-based medical diagnostics firm Exact Sciences doesn’t have to repay tax credits because it created more jobs in Wisconsin than required.
The Wisconsin Economic Development Corp. on June 11 told the president of Exact Sciences that based on new calculations for job creation, the company did not owe any tax credits.
But Exact Sciences had maintained that it created more than enough Wisconsin-based jobs in 2017 to fulfill terms of the incentive contract, said company spokeswoman Cara Connelly. Exact Sciences asked the WEDC to recheck the numbers, Connelly said.
WEDC calculated tax credits the company earned through the end of 2018 and determined the company had exceeded the number of jobs that had to be based in Wisconsin by 352 jobs, WEDC CEO Mark Hogan said in the letter to Exact Sciences president Kevin Conroy.
Because of that, the company owes nothing in back tax credits, Hogan said.
“We were pleased, and we thought that would be the case,” Connelly said.
Exact Sciences makes Cologuard, a colorectal cancer diagnostic test that can be used at home to screen for DNA biomarkers in stool. It was approved by the U.S. Food and Drug Administration in 2014, and during the first three months of this year more than 2 million patients had used it.
Exact Sciences has two labs in Madison and is planning to build a third site. It has 2,300 employees, including 1,800 in the Madison area.
Exact Sciences’ 2014 contract with the state required it to create up to 758 full-time jobs by 2020. Through the end of 2018, the company had created 1,472 jobs filled by Wisconsin residents, of which 1,306 qualified for tax incentives, Hogan said.
The company qualified for the full amount of job creation tax credits by the end of 2018 with or without the 261 jobs noted in the audit that were not based in Wisconsin, Hogan said.
The location of jobs for purposes of qualifying for tax credits has been an issue, especially for critics of the state’s contract with Foxconn Technology Group, which could yield that company more than $4 billion in state and local tax credits.
Connelly said Exact Sciences promised to return the money last month just in case there was a mistake or any doubt about the job creation numbers. But she said Exact Sciences was confident all along that the terms of the deal had been met and no tax credits were awarded improperly.
WEDC is in charge of job creation for Wisconsin and this year approved more than $3.1 billion in tax credits, grants, loans and bonds. Its handling of those awards, especially its tracking of companies in default, has been under scrutiny for years.
The most recent WEDC audit released in May found continued problems with how it tracks job creation and awards to companies. The money awarded to Exact Sciences was one of the highlighted cases, but the company was not named. WEDC released the name following an open records request.