Tax Credit Authority Won’t Address GM’s $60M Tax Liability Until Aug. 31

YOUNGSTOWN, Ohio – The Ohio Tax Credit Authority will not address at its meeting today whether General Motors is liable for $60 million in tax breaks it received more than 10 years ago under the condition that it would keep its Lordstown plant open.

Instead, the GM matter is tentatively scheduled for the agency’s next meeting Aug. 31, according to Todd Walker, spokesman for the Ohio Department of Development Services.

As The Business Journal and ProPublica first reported June 15, the state placed GM on notice in March that the automaker was in violation of two job creation and job retention tax credit agreements it signed in 2009 worth $60.3 million. At the time, the state said it would seek to recoup the entire amount.

In exchange for the tax breaks, GM promised to keep its Lordstown plant open for at least 30 years.

GM shut down the Lordstown operation in March 2019 and officially closed the plant that October following a bitter, 40-day strike. The plant has since been sold to Lordstown Motors, a startup automaker that wants to produce an electric pickup dubbed The Endurance.

GM has argued that any tax liability should be substantially reduced or waived entirely. The company justified its position by underscoring that the automaker still conducts a significant amount of business in Ohio, that the Lordstown plant was sold to another automaker and that GM has committed to building a new, $2.3 billion battery-cell production plant in the area that would initially employ about 1,100 people.

About 4,000 hourly employees worked at the Lordstown plant as recently as four years ago. Beginning in January 2017, the automaker started to cancel shifts at the plant, which produced the Chevrolet Cruze. On March 6, the final Cruze rolled off the assembly line and the remaining 1,500 workers lost their jobs.

Elected officials across the state have urged Ohio to stand firm with GM and clawback the $60 million.

In an unprecedented move, Ohio Attorney General David Yost in late June filed an amicus brief before the tax authority demanding the state collect the entire amount from GM.

“Ohio never assumed GM’s business risks, and was denied the benefit of the bargain,” Yost’s brief noted.

Should the tax authority mandate that GM repay its full tax credit and the company refuse to honor the demand, then the “attorney general is prepared to enforce the matter in court,” the brief said.

Related news:
June 30: Yost Demands GM Repay $60M in Tax Credits for Lordstown Plant
June 24: DeWine: Ohio ‘Not Actively Pursuing’ $60M Clawback from GM for Lordstown Closure
June 15: Exclusive: Ohio Seeks $60M from GM for Closing Lordstown Plant

Pictured: The last Chevrolet Cruze rolls off the Lordstown assembly line, March 6, 2019.

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