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Clawbacks proposed for companies that flee Indiana

March 1, 2016

An amendment would create a new financial penalty for companies that leave Indiana to move to foreign countries after they receive state tax breaks.

“Today’s vote represents a chance for the members of the Indiana General Assembly to tell companies that they do not have the right to take full advantage of taxpayer-funded assistance to locate in our state, only to abandon us to move out of the country when they get a better deal for their shareholders,” Rep. Karlee Macer, D-Indianapolis, said. “They cannot do it without repaying us for some of what they have taken.”

The amendment would allow local governments to claw back property tax incentives granted to a company if the company later moves out of the state. The company would have to pay back the amount of property taxes they originally hadn’t been required to pay.

In February, United Technologies announced it would be closing two Indiana Carrier plants and move those operations to Mexico, a move that would put some 2,100 Hoosiers out of work. According to Macer, the company had received millions in tax abatements.

Macer introduced the amendment to Senate Bill 308, a bill that deals with various tax matter, but the addition wasn’t completely welcomed in the House on Tuesday.

House sponsor of SB 308, Rep. Tim Brown, R-Crawfordsville, urged his fellow members not to adopt the amendment

“Property tax [incentive changes] can all be done by local ordinances,” he said. “Locals can put these in the abatement ordinances or abatement agreements that they do with a business going forward,” said Brown.

But House Minority Leader Scott Pelath, D-Michigan City, said the state needs to stand up for itself.

“This amendment is extraordinarily simple,” said Pelath. “If we give you a bunch of taxpayer help, and you say you’re moving to Mexico—unpatriotically I might add—tax abatements come right back.”

The amendment passed 60-34 and is now eligible for consideration in the House.

“I feel like this is a really great opportunity to make sure that we’re putting some real nuts and bolts to the plan to make sure that these people that work so hard, for companies, like Carrier, are recognized, and they can’t just get away with walking out the door,” said Macer.
 

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Recent Articles by Jasmine Otam, The Statehouse File

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