A recent Michigan Supreme Court Ruling will expose a secretive tax credit scheme that has allegedly allowed GM to collect millions in business tax refunds from the state, according to a new report.
GM, along with Ford and Stellantis (formerly Fiat Chrysler Automobiles) previously signed a deal with the Michigan Economic Development Corp., a public-private partnership agency, entitling them to Michigan Economic Growth Authority (MEGA) tax credits. Together, the Detroit Big Three receive approximately $600 million in refunds from Michigan’s tax revenue pool each year, according to The Detroit News, however these tax credit amounts are not disclosed until a year later and thus cannot be taken into account when the budget is being made.
A previous ruling made under Gov. Rick Snyder allowed GM to keep the total value of these tax credits a secret, however the recent Michigan Supreme Court ruling will force it to share details of the 2016 agreement. The Detroit News says this ruling could also provide a more in-depth look at how much the automaker has received in state tax refunds in total since 2009.
Chris Meagher, manager of public policy communications at GM, previously said the value of the tax rebates was being kept on the down low for competitive reasons.
“GM considers that information proprietary and competitively sensitive, so we don’t disclose that number,” Meagher told The Detroit News.
The Big Three have been allowed to reclaim most of their employees’ state income taxes through tax credits since 2009 thanks to a deal they struck with then-Gov. Jennifer Granholm. The tax credit program will remain in effect until 2030, although The Detroit News points out that it’s unlikely the automakers will want to relinquish the deal and begin paying the regular six percent corporate income tax in the state.
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Comments
I don’t know why this would surprise anyone. The state is going to do whatever it can to keep the jobs from leaving, and it looks like both sides of the aisle were ok with it.
It’s a surprise because something about corporate greed, paying their fair share, CEOs making too much money, people not making a living wage, and whatever other talking points are out there…
…and with that. We are all surprised, outraged, and paid protesters are enroute to GM headquarters.
Unfortunately if michigan does not poney up, other states will. The idiot Rick Snyder- the guy who poisoned Flint’s water, thought the state could court new business without these tax credits and incentives. After seven years of losing major project after major project, he finally realized incentives are important.
CEO’s making too much money? Do you have any problem with a pro athlete making $75 million a year?
Its not a secret. No one has ever taken the time to read the Bill. Much like Washington. Build Back Better!?
I don’t have a problem with any person or company exploiting all advantages if they do so legally. When the laws aren’t good anymore, for the taxpayer, they can and should be changed.
This said, I generally disagree with Granholm on every topic, and while I didn’t pay any attention to her governorship, I generally find her to be incompetent in her current role.
Based on these assumptions, I’m guessing this tax deal wasn’t good for the taxpayer…but was obviously good for GM and probably the unions indirectly…she’s pushing EVs now with the rest of the Biden admin…even if I completely favored EVs, I’d be hesitant to side with any Granholm policy.
Chris Meagher, manager of public policy communications at GM, previously said the value of the tax rebates was being kept a secret for competitive reasons.
Now I know what it means when somebody says “Government Motors”.