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.