A big technology company is seeking big-time tax incentives in order to make a big investment in the Texas’s capital city.
On Thursday, Community Impact’s Christopher Neely reported Samsung Semiconductor is seeking a 100 percent tax rebate from the City of Austin for more than 20 years in exchange for building a $17 billion facility within its borders.
The news comes after a few weeks of rumors that Samsung was considering further investment in Austin, a theory partially validated by the company’s request to the Austin City Council to relocate part of Samsung Boulevard. Rumors also swirled Austin City Council had even extended a massive incentive offer to the technology giant.
According to Community Impact, however, that offer has been rejected and the chip manufacturer is demanding a more lucrative arrangement.
According to documents, Samsung rejected a city offer that included nearly $650 million in economic incentives over a 10-year span. The proposal would have been a record corporate incentive from the city, exponentially topping the current record—a still active incentive package, initially estimated at $62.9 million, offered to Samsung in 2006 for its existing $4 billion chip manufacturing plant, according to economic incentive data from the city.
However, Samsung wants more for its latest mega-project and has asked for a 100% tax reimbursement over a 25-year term.
Samsung can also be expected to seek funds from Travis County, which has already accepted an economic incentive application from the technology giant, and the Gov. Greg Abbott-run Texas Enterprise Fund. In 2006, the company received $10.8 million after announcing its plan in the state’s capital.
While the allure of bringing a big company to the state capital is certainly understandable, the best deal for taxpayers isn’t giving preferential treatment to a big company over them. Instead, Gov. Greg Abbott, the Texas Legislature, and local officials should look to reduce the burden property taxes imposed on individuals and businesses who would no doubt enjoy the same 25 year 100 percent break Samsung is asking for.