December 13, 2013

Financial Times: US states trade tax offers in battle to host Boeing

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(Original Post)

Excerpt

States and localities devote an estimated $50bn to tax incentives every year as they jockey for the promise of jobs related to new company operations or the threat of relocation, according to the Washington-based Institute on Taxation and Economic Policy (ITEP) think-tank.
Recent examples include Archer Daniels Midland, an agribusiness group, that has solicited tax breaks from cities as it seeks to move its corporate headquarters from central Illinois, and the recently merged OfficeMax-Office Depot, which has opted to consolidate employees in Florida over Illinois, at least partly because of a lack of incentives.
“The tax incentive war has become so intense that you can’t just give an incentive up front and expect to sit around,” says Carl Davis, senior analyst at ITEP. “Companies are expecting to get one [again] in order to stick around.”

“States and localities devote an estimated $50bn to tax incentives every year as they jockey for the promise of jobs related to new company operations or the threat of relocation, according to the Washington-based Institute on Taxation and Economic Policy (ITEP) think-tank.

Recent examples include Archer Daniels Midland, an agribusiness group, that has solicited tax breaks from cities as it seeks to move its corporate headquarters from central Illinois, and the recently merged OfficeMax-Office Depot, which has opted to consolidate employees in Florida over Illinois, at least partly because of a lack of incentives.

“The tax incentive war has become so intense that you can’t just give an incentive up front and expect to sit around,” says Carl Davis, senior analyst at ITEP. “Companies are expecting to get one [again] in order to stick around.””

 


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