Local Politics

Dell plans to keep N.C. tax breaks

Posted December 8, 2009 5:19 p.m. EST
Updated December 8, 2009 7:16 p.m. EST

— 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.

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.