February 2020 – State and local tax governments are thinking twice about tax incentives used to attract major businesses. During the peak of the recession recovery, many cities, counties, and states were shoveling tax reductions and subsidies at major corporations in order for legislators and governors to show their avid attempts to lure more job opportunities to their state.
Studies show that many companies are not able to provide the promised amounts of new job opportunities leading to some companies having to repay the conglomeration of tax savings, especially with the corresponding price tags. For example, according to The Hill, “Washington State approved an incentive package worth $8.7 billion to keep Boeing jobs in the Seattle area. New York offered Alcoa a package worth $5.6 billion in 2007. Nevada handed Tesla a $1.3 billion package in exchange for a high-tech gigafactory.”
While these incentives seem to be working, the tax reduction deals are not always favorable to both ends causing state and local governments to begin to think twice.
To read the full article from The Hill, click here.
