If Fiat Chrysler wants to receive the maximum amount of tax credits in Michigan, it has to invest 1 billion dollars more.
Under a new agreement between The Michigan Strategic Fund and Fiat Chrysler, the automaker has to make an addition 1-billion-dollar investment by 2029 for it to receive the maximum amount of state tax credits it is entitled to. The modification limits the value of tax credits issued to FCA through 2014 that the automaker can claim to $1.7 billion. “The amended tax credit agreement with the MEDC provides greater economic certainty for all parties, caps the value of tax credits FCA US can claim, and requires the Company to make an additional $1 billion capital investment over the remaining term of the Global MEGA Tax Credit,” the company said in a statement today. “FCA US, which has invested more than $4 billion in Michigan and added nearly 15,000 new jobs since 2009, does not have any future investment plans to announce at this time.”
The MEGA tax credits were introduced right after the recession, in order to stimulate the largest automakers in Detroit – GM, Ford and Chrysler – to keep around 86,000 jobs in the state. They were promised about 4.5 billion dollars until 2031, but the amendment reduces the term of the MEGA tax credit agreement by two years. In return, FCA must invest an additional $1 billion in Michigan until 2029 on top of the $3.3 billion it had promised.
This new amendment is not the first attempt to limit the amount of tax credit given by the state. Ford also agreed this year to invest an additional 3.1 billion dollars in Michigan by 2025 in order to receive the maximum amount of tax credits it was entitled to.
Via Automotive News