Wisconsin just denied Apple's biggest supplier a huge tax break after the company failed to build a factory that promised to bring thousands of jobs to the state
A journalist photographs the location where President Donald Trump will later speak at the groundbreaking ceremony for the Foxconn Technology Group on June 28, 2018 in Mt Pleasant, Wisconsin.
Wisconsin has denied Foxconn's application for tax aid on the grounds that the electronics maker failed to build the promised factory, The Verge reported Monday.
In 2017, the company signed a contract with the state to build a large-screen TV production facility and created 13,000 jobs.
The Wisconsin Economic Development Corporation, however, denied Foxconn's application for tax subsidies, finding that only 281 people had been hired by the end of 2019 who meet the qualifications listed in the contract.
Foxconn is Apple's largest manufacturing partner with a Chinese factory producing well over half of the world's iPhone range.
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Wisconsin denied a tax break to Foxconn, Apple's largest supplier, after the electronics maker failed to build a factory in the state, The Verge reported Monday.
The state signed a contract with Foxconn in 2017 for a large LCD facility, known as the Gen 10.5 factory, to be built in the state, which is expected to create 13,000 jobs. In return, Foxconn would receive incremental tax subsidies of around $ 4 billion.
However, according to the Wisconsin Economic Development Corporation (WEDC), the company still has to employ the number of employees Foxconn needs to receive the subsidies, according to the report. The agreement stipulated that Foxconn must have at least 520 employees by the end of 2019 in order to receive the tax subsidies. Foxconn said it has hired 550 people, but only 281 of them meet the qualifications listed in the contract, according to WEDC.
"The recipients are not entitled to tax credits because they did not carry out the project," wrote the WEDC in its letter to Foxconn, according to The Verge. "The fact that the recipients neither built nor commissioned nor commissioned the required TFT-LCD production line of generation 10.5 (the" 10.5 Fab ") is undisputed."
Foxconn did not immediately respond to Business Insider's request for comment.
The Foxconn and Wisconsin agreement has stalled since its inception, but the failure to build the 20 million square foot factory remains the deal's biggest pain point. The factory was originally intended to produce advanced large-screen televisions. After the company found this route too expensive, it changed its plans to make smaller screens instead.
The company tried to tweak its existing contract with the state to align it with its updated plans that would include a smaller factory and a much smaller number of people working there, but a revised deal was never finalized.
President Donald Trump visited the plant in 2018 as the government pushed for a revival of manufacturing on American soil.
Foxconn is the largest iPhone manufacturer in the world. The huge manufacturing facility in Zhengzhou, China - also known as "iPhone City" as Business Insider reported in 2018 - produces more than half of the world's smartphones.
You can read the full report on The Verge here.
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