Massachusetts: Amazon to Receive Millions in Tax Credits for a New Fulfillment Center
Massachusetts Gov. Charlie Baker recently announced approval of an incentive package for a proposed expansion of an Amazon.com fulfillment center that will sit in both the City of Fall River and the Town of Freetown, in Bristol County. Officials expect it to be operational in late 2016. The state’s Economic Assistance Coordinating Council (EACC) approved the project, granting Amazon $3.25 million in tax incentives. The incentives include $2.25 million in investment tax credits, and $1 million in job creation tax credits.
In addition, the EACC approved $11.6 million in local tax incentives that Amazon had previously negotiated. In particular, Fall River has agreed to a $7,808,850, 15-year Tax Increment Financing and Personal Property Tax Exemption, and Freetown has agreed to a $3,830,425, 15-year Tax Increment Financing and Personal Property Tax Exemption.
In return, Amazon will invest $54 million in a one million square foot sortable fulfillment center. Approximately 60 percent of the new construction will be in Fall River and 40 percent will be in Freetown.
The Commonwealth’s Economic Development Incentive Program (EDIP) will facilitate the project. The EDIP is a tax incentive program designed to foster job creation and stimulate business growth throughout the Commonwealth. It expects 500 new full-time jobs and 2,000 seasonal jobs in Massachusetts, and $54 million of additional funding via private investment.
The Boston Globe revealed opposing perspectives on the news. Opponents suggest that the state was giving away the tax breaks unnecessarily because Amazon is already large and successful.
On the other hand, Jay Ash, the state’s Secretary of Housing and Economic Development, characterized the plan as a “big deal” because the area badly needs the blue-collar jobs; the state needed to offer such generous incentives to compensate for a relatively unfriendly business environment. He continued, “we face an uneven playing field because of the high cost of energy and the general cost of doing business in Massachusetts, so we’re using tax credits, we think wisely, to level the playing field on projects that have great returns on investment.”