Local Politics

Dell plans to keep N.C. tax breaks

Posted December 8, 2009

— Dell Inc. (Nasdaq: DELL) officials said Tuesday that the company is entitled to keep the money saved through tax breaks the state offered to convince the computer maker to build an assembly plant in Winston-Salem.

Dell opened the plant in 2005 but announced in October that it would close the operation by January, laying off more than 900 workers, as it shifts assembly operations to lower-cost areas like Mexico.

Gov. Beverly Perdue Perdue plans to fight Dell over incentives

Officials promised more than $300 million in state and local incentives to lure Dell to the region, and the company agreed to repay more than $26 million in local grants and $1.5 million in state grants, acknowledging that it didn't live up to its end of the deal by not keeping a specified number of jobs in Forsyth County.

State officials said they believe Dell also should give back about $6 million in tax breaks the company received between 2005 and 2007, but a Dell spokesman said the company is entitled to keep the money since it was operating at the time.

"Our belief and our understanding is that we met the performance thresholds required for those incentives during those years, and are not obliged to repay those," spokesman Jess Blackburn said.

Gov. Beverly Perdue said Tuesday that the state deserves to get back "every red cent."

"I will fight them if they want to fight about this," Perdue said. "They made some agreements. We offered some incentives. The locals offered some incentives, and they need to live up to their side of the bargain. If that means going to court, I guess we will."

Her aides later clarified her comments, conceding that, by law, Dell might be entitled to keep some of the tax breaks they earned while in business.

House Minority Leader Paul Stam issued a statement Tuesday saying the dispute could have been resolved long ago. Lawmakers defeated an attempt to include language in the state incentives package that would have required Dell to forfeit all credits it received from the state if it didn't have at least 1,200 employees at the computer plant within five years, said Stam, R-Wake.

57 Comments

This story is closed for comments.

Oldest First
View all
  • superman Dec 10, 2009

    If you have anything other than a Dell, your have an inferior computer. I like to hear you whine and cry when your company buys something other than a Dell. In a year or so you would be complaining again that they junked the HP's or whatever and went back to Dell. My first computer years ago was an Atari. Been working with computers for a long long time. I also purchased a Dell laptop for each of my 4 grandchildren-- the youngest of which is only 6. The Dell will outperform and outlast any other computer on the market. I was the computer administrator for a large comporation for many years and have also taught computers in college. But then -- what would I know? I dont own any Dell stock. I sold everything I had the day I saw on TV that they were considering a bailout for the banks. Computers are my passion. I have 5 Dell desktops and a Dell laptop and 8 printers in my home. I dont have a business just use them for personal use.

  • commandokidd Dec 9, 2009

    900 jobs heading "South of the Border. I wont buy another Dell as long as they make them.

  • slick rick da troll whisperer Dec 9, 2009

    "Oh and don't beleive that his salary is only 1 mil a year."

    his salary for 2008, per their proxy statement(they're reliable sources of info) was $950K. his total compensation was $2.3 million. but, unless dell's stock price rebounds, his actual compensation for 2008 will be quite a bit less than that because all of his options are currently underwater.

    http://www.dell.com/downloads/global/corporate/sec/proxy08.pdf

  • ifcdirector Dec 9, 2009

    And so the corporate bribery scheme with our tax dollars (after all that's free money for democrats right?) continues. What's the definition of insanity again? Something about expecting different results. Keep voting them into office folks and this is the kind of leadership and representation you will deserve.

  • slick rick da troll whisperer Dec 9, 2009

    as unfortunate as it is, dell is probably going to be entitled to keep the incentives they received for the time that they met the conditions. this is probably nothing more than posturing by perdue because she knows the state would be outraged if she just caved. in the end though, i hope money isn't waisted on a lawsuit if it is probable that dell would win.

  • TechRescue Dec 9, 2009

    "All I want for Christmas is an effective and smart Democrat for governor in 2012."

    Note the words "ethical" and "honest" are missing. Judging by all of the convictions and investigations of our ruling party, that would probably narrow the list of Democrat candidates severely.

    Every time I see a bumper sticker that says "Stop Corruption - Vote Democratic", I laugh for blocks....

  • scientistjo Dec 9, 2009

    This is why we all need to use "PCs for Everyone". They custom make a computer for you and it's much cheaper and more reliable than Dell. Unfortunately, were I work we all have to use Dell.

  • ncguy Dec 9, 2009

    China, Mexico, and even Canada.

    This is the begining of the end.

    America doesn't make anything anymore- Very Sad.

    I'm glad Michael Dell is selling out his country and laying off hundreds to get a bigger bottom line.

    I guess he needs the extra money to afford that new Bentley.

    Oh and don't beleive that his salary is only 1 mil a year.

  • djcgriffin Dec 9, 2009

    Her aides later clarified her comments, conceding that, by law, Dell might be entitled to keep some of the tax breaks they earned while in business.

    LOL. This was the best line out of the whole story.

    Cmon Bev, could we please research before we speak?

    Dell really did play this one well. Touche.

  • DontLikeTheSocialistObama Dec 9, 2009

    Dell played North Carolina like a fiddle.

    Barney Fife must have negotiated the incentives package.

    Couldn't have been Sheriff Andy, he's too smart to be taken by a big city conman like Dell.

More...