Back in 2003, when Pfizer acquired Pharmacia, Michigan Gov. Jennifer Granholm offered the company:
... an incentive package valued at up to $635 million over a 20-year period based on the company investing $784 million in four expansion projects and creating 2,100 new jobs in the Kalamazoo area. The majority of the incentives offered are only available to Pfizer if it maintains 8,500 jobs in Michigan, including 5,000 in research and development.The 2003 package had a contingency:
Specifically, the incentives were offered to convince Pfizer to build out its existing Kalamazoo facilities.UPDATED: Pfizer never took advantage of that program, which was withdrawn unused within a couple of years, Pfizer says. (Download a statement from Pfizer on the 2003 program here.)
The current tax break that Pfizer wants would thus reward the company for taking advantage of the 2003 incentives, and for continuing to exist* would kick in even though Pfizer has already committed to Kalamazoo, according to the Kalamazoo Gazette:
A $28 million business investment is nearly complete, and most of the 350 employees affected by the project are already working downtown.Here's the confusing part: Pfizer's doings in Kalamazoo will bring in $395,000 in new revenue, but a 50 percent abatement will lower an expected $291,000 tax increase down to $145,500.
BNET readers are already familiar with the fact that major drug companies maintain the Helmsley-esque position that "only the little people pay taxes." Sanofi-Aventis, Sepracor and Bayer have all recently asked the towns that host them to allow them to weasel out of their responsibilities (see links below).
Granted, it's nicer if a large employer stays in town than moves away. But look at how low the 2003 hurdle was for Pfizer in Granholm's (unaccepted) 2003 offer:
The legislation would give the pharmaceutical company breaks on the single business tax for creating as few as five new jobs.It's not all good news for Pfizer on the tax front. Its most recent 10-Q statement with the SEC indicates that the company is being audited by the IRS for 2002 through 2008. In foreign countries, Pfizer is being audited for the following years:
Canada (1998-2008), Japan (2006-2008), Europe (1997-2008, primarily reflecting Ireland, the U.K., France, Italy, Spain and Germany) and Puerto Rico (2004-2008).*Correction: Pfizer did not take advantage of the 2003 package from the state.
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