Amazon’s sales, profitability still strong after 4th quarter: Report
Amazon’s earnings report, released on Thursday, shows strong numbers.
About one year after e-commerce giant Amazon scrapped plans to build an HQ2 location in Long Island City, New York, lawmakers who opposed the plan are looking to restructure city programs that would have given the company massive tax breaks.
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New York Senate Deputy Majority Leader Michael Gianaris is aiming to modify programs that offer companies tax credits for things like relocating jobs or initiating construction in neighborhoods outside of the heart of Manhattan.
“These broken programs represent the failures of our economic development system,” Gianaris told FOX Business in an emailed statement. “We must institute reforms, including a per project cap, so no company can try to raid these incentives again.”
Gianaris is working on legislation towards this effort, as first reported by Wall Street Journal this week.
Gianaris, who represents the district where Amazon’s HQ2 facility was expected to be built, is targeting one program known as the Relocation and Employment Assistance Program. The benefit is an annual credit of $3,000 per employee hired in certain qualified locations. The program is set to expire at the end of June.
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In an interview with the Commercial Observer, Gianaris said lawmakers “learned a lot of lessons from the Amazon debacle” and that he wants to impose some “intelligent guideposts” on programs so that they’re not “subject to abuse the way they were.”
Those reforms include a potential cap on access to the programs on a per-project basis. The other project he is looking to reform is the Industrial & Commercial Abatement Program (ICAP).
“You shouldn’t be able to have one project coming in and getting over a billion dollars of subsidies through these programs as of right. That’s ridiculous,” Gianaris told the publication.
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In exchange for the creation of 25,000 jobs and a $2.5 billion investment, New York was prepared to offer Amazon performance-based incentives worth $1.525 billion.
Of that $1.525 billion, it would have received a refundable tax credit worth as much as $1.2 billion over 10 years for the salaries it was to pay workers. That equals about $48,000 for each of the 25,000 jobs it created.
Amazon also received $325 million based on the square footage of the facility it was to occupy over the coming decade.
All of these incentives were to be awarded over the course of a decade, so long as the company met hiring objectives.
Amazon pulled the plug on its plans for its Long Island City headquarters about one year ago, citing a lack of support from elected officials. It is, however, moving ahead with plans to build its other HQ2 in Arlington, Virginia.
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