Samsung has submitted documents to officials in Texas, asking for $ 1 billion in tax incentives to make Austin the future home of the company’s $ 17 billion chip factory, as reported by Bloomberg and reported last month by the Austin American-statesman. In the documents, which were filed in January, the company says it plans to create 1,800 permanent jobs at the plant in the first 10 years, with an average starting salary of around $ 66,000.
In return, Samsung is asking for a reduction in its property taxes: it seeks a 100% break on its payments to Travis County for 20 years, which the company says would save it around $ 718 million, and a 50% reduction on taxes. to the city of Austin for five years, with an estimated amount of $ 87 million. He also wants the state to subsidize its property tax payments to the school district.
It seems that Samsung is still trying to decide where to locate the plant: in the documents, the company describes the project as “highly competitive” and states that “[d]Due to the higher tax cost of operating in Texas, limiting the appraised value is a determining factor. Without the estimated value limitation award, the company would likely locate the project in Arizona, New York or Korea. ”
If Samsung chooses Austin, it would expand its existing plant there – the company already has a chip manufacturing plant in the city, which has been in existence since 1997. The plant currently employs around 10,000 people, and the Austin American-statesman notes that Samsung recently purchased 257.7 acres of land near its existing plant.
Looking for incentives in cities and states is nothing new, but Samsung is asking for a lot, especially compared to Tesla, which is also building a factory in Austin: The automaker only got about $ 60 million in funding. county and school tax cuts. district. The two planned factories are not directly comparable due to differences in cost, number of jobs and wages, etc., but Samsung is still looking for an order of magnitude higher than what Tesla received. Samsung may have used the $ 1 billion figure as an opening negotiation, but the deals being negotiated don’t appear to be public yet.