Wisconsin has reworked its contract with Foxconn, slashing the firm’s possible incentives from nearly $3 billion down to $80 million.
The renegotiated contract between Foxconn Technology Group and the state of Wisconsin offers the company up to $80 million in tax credits if the company hits certain hiring and investment targets.
The deal dramatically cuts the potential incentives available to the company under a previous agreement negotiated by former Gov. Scott Walker. That deal offered up to $2.85 billion in tax incentives if the company created 13,000 jobs and invested $10 billion.
Specifically, the new deal requires the company to hire 1,454 qualified workers at an average wage of $53,875 and invest $672 million in capital spending.
Hitting the job targets would earn the company $20.3 million in tax credits while the capital investment targets are worth another $40 million. Another $19.7 million, earned with previous capital investment, would be available if the company created more than the 1,454 jobs included in the contract.
Not only does the new deal set lower job and investment targets, it also offers less of a credit for each dollar the company pays in wages and investment. Under the original deal, Foxconn earned a 17% credit on wages and a 15% credit on capital investments. The new deal drops those figures to 7% and 10% respectively, the same rates available to other companies under Wisconsin’s enterprise zone tax credit program.