Jun 3, 2022 - Business

Ohio capital budget promises Intel more tax breaks

Intel CEO Patrick Gelsinger at a presidential lectern as President Joe Biden looks on. A wall poster reads "A Future Made in America."

Intel CEO Patrick Gelsinger in January, announcing plans to build a $20 billion semiconductor manufacturing plant near New Albany. Photo: Chip Somodevilla/Getty Images

The state of Ohio continues to roll out the economic red carpet in support of Intel's new megaproject in Licking County.

Why it matters: Fiscal analysts estimate additional incentives from the state capital budget will cost Ohio hundreds of millions of dollars in tax revenue.

State of play: Ohio had already offered Intel nearly $2 billion in incentives, including direct payments, infrastructure improvements and a slew of tax credits.

  • That doesn't include additional grant funding from the state's private economic development arm, JobsOhio, and a city tax abatement from New Albany.

Details: The budget exempts Intel from paying a commercial activity tax on equipment costing more than $100 million.

  • It also exempts it from paying state sales tax on some equipment used for construction, manufacturing and research and development.

Yes, but: Included is a clawback provision that would let Ohio recoup lost funds if Intel doesn't uphold its promise to create thousands of high-paying jobs.

What they're saying: Research group Policy Matters Ohio argues the state should have given citizens more time to consider the weight of these incentives before approving them, the Ohio Capital Journal reports.

  • "These new exemptions can't possibly be subject to sufficient scrutiny in a day's time," the group contends.
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