Samsung is seeking a taxpayer bung of almost $1bn for its proposed semiconductor fabrication plant in Texas, according to documents filed with the state.
The requested package [PDF] includes tax reductions from the city of Austin, Travis County, and the Manor Independent School District, as well as unspecified "assistance" from the Texas Enterprise Fund.
In total, Samsung is seeking $805m in property tax abatements, with Austin cutting taxes by 50 per cent for the first five years of operations, and Travis County foregoing all property tax revenue from the project until 2030. Separate deals with the Manor Independent School District may total more than $200m over 20 years, with Samsung aiming to reduce its tax liability from $2.05bn to $1.79bn.
Property taxes in Texas are the seventh-highest in the US, with an average rate of 1.82 per cent in Travis county, which includes Austin. The Lone Star State lacks a statewide income tax, inheritance tax, or state tax, which forces it to look elsewhere for funds, relying heavily on property taxes and sales taxes to make up the difference.
It's not clear whether Samsung will get its requests, although it strenuously made the case that the project will prove beneficial to the local area. In its filing, Samsung said it expects the creation of nearly 3,000 new jobs, of which 1,800 would be directly employed by the company. It also expects $8.6bn in local economic impact during the first 20 years of operation.
The facility itself, meanwhile, is mooted to cost more than $17bn. Over $5bn of this is earmarked for construction costs, with $4bn expected to be spent locally with architects, engineers, and suppliers. A further $9.9bn will be spent on machinery and equipment. Lithography machines don't come cheap, after all.
Samsung celebrated 25 years of operations in Austin earlier this month, first establishing a presence in February 1996 with a fabrication plant opening the following year tasked with producing DRAM chips. One decade later, Samsung opened yet another fab plant in the city, which it subsequently expanded in 2017.
Despite that storied history, Samsung claimed to be willing to move elsewhere for a better deal, evaluating sites in Arizona, New York, and Korea.
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"Samsung Austin Semiconductor is evaluating the locations using four criteria to evaluate these sites: access to talent, existing semiconductor manufacturing ecosystem, speed to market, and strong public private partnership," Samsung's application documents state. "Because of its strong ties to the local community and the successful past 25 years of manufacturing in Texas, Samsung Austin Semiconductor would like to continue to invest in the city and the state."
If Samsung and the local authorities can reach a deal, the company hopes to break ground on its new facility in June, with operations scheduled to start in Q4 2023. ®