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. 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.
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.
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.
In exchange for the smaller incentives, Foxconn is now free to earn credits on any economic investment activities related to operating a technology and manufacturing ecosystem. The previous deal had required the company to build a Gen. 10.5 LCD screen fabrication facility in Mount Pleasant, a plan the company had abandoned by the spring of 2018.
The deal also adds Foxconn Industrial Internet as an eligible tax credit recipient. Fii is a publicly traded company that was spun off from Foxconn’s parent company in recent years. It has already been making investments on the Mount Pleasant site where Foxconn originally planned to build its LCD plant.
Finally, the new contract plays out over a dramatically shorter timeframe. The previous deal ended at the end of 2032 while the new one ends in 2025.