Husco International and Teel Plastics have collectively paid back $194,945 to the state, returning money initially received from tax credits.
These are two of five companies listed in the Wisconsin Economic Development Corporation’s Tax Credit Revocations report.
Husco International, a manufacturer based in Waukesha, had to pay back $126,185 after it reduced its employment level below 559 and failed to maintain the 30 jobs it added in 2014. At that point, WEDC revoked all its tax credits, which were granted in 2013 for capital investment and job creation.
According to Mark Maley, WEDC spokesman, Husco had reached out to the WEDC knowing that it wouldn’t be able to fulfill its contract, wanting to repay.
“It was not an issue at all,” said Maley. “But that’s not always the case.”
Baraboo-based Teel Plastics, which entered its original contract in 2010 with the former Wisconsin Department of Commerce, had to pay back $68,760 after losing 18 jobs it had created.
The jobs were lost because the company sold the division containing those jobs to Razor Components in 2012. According to Maley, those 18 jobs have remained in Baraboo.
The Tax Credit Revocations report was created as part of the Credit and Risk report presented to the WEDC board earlier this months. The reports are done as part of WEDC’s effort to be “transparent with the board and with the public,” Maley told WisBusiness.com.
For a typical contract, companies have three years to earn tax credits for creating jobs, securing capital investments, building multi-million dollar facilities or even for maintaining jobs at a certain level, said Maley.
Most contracts include a two-year maintenance period in which companies must keep up contractually obligated job levels to prove that growth is sustainable.
“All tax credits have to be earned,” said Maley, adding that the maintenance periods keep companies honest.
All five companies included in this report “for various reasons, didn’t create or maintain the jobs they were supposed to under the contract,” said Maley. Husco and Teel Plastics paid back money for the tax credits directly to WEDC.
That’s not the only option for companies in this predicament, as they can alternatively choose to “work it out with the Department of Revenue,” according to Maley. That is what the other three companies in the report–EMTEQ, Renewegy and Novation Companies–are going to do.
WEDC has performed other tax revocations in the past, but this report was assembled for the first time this year.
–By Alex Moe
WisBusiness.com
