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State waives $625K in taxes for wind turbine manufacturer

The free pass from the typically hard-nosed state tax collection agency provoked local officials, who raised concerns over the secretive process. “We got a letter back just stating that they (Department of Revenue) granted the waiver, but no reason why,” said Stout. “And then, when we called to find out, they wouldn’t tell us and said it was confidential. We just really thought it was not a good deal.”

Thousands of Minnesota businesses experienced tough times without getting a break on paying state taxes.

But that’s just business. Or is it?

The Job Opportunity Benefit Zone economic development program allows the state to waive repayment of taxpayer-funded benefits for businesses under certain conditions, including “unforeseen industry trends.”

Good luck trying to get the specifics from the Minnesota Department of Revenue.

“By law, the department cannot confirm, comment on, or disclose private or nonpublic taxpayer return information,” Minnesota Department of Revenue spokesman Ryan Brown told Watchdog Minnesota Bureau in an email.

The latest example unfolded in Pipestone, where multinational Suzlon Rotor Corporation—“powering a greener tomorrow”—petitioned the Minnesota Department of Revenue to write off $710,000 in property, corporate and sales taxes on its idled wind turbine manufacturing plant, which was built in 2006.

“SRC hereby requests that the aforementioned repayment obligations be waived due to circumstances beyond SRC’s control, namely, unforeseen industry trends which have caused a major decline in the wind energy industry to the determent (sic) of SRC,” states a June 6,... more [truncated due to possible copyright]  

Thousands of Minnesota businesses experienced tough times without getting a break on paying state taxes.

But that’s just business. Or is it?

The Job Opportunity Benefit Zone economic development program allows the state to waive repayment of taxpayer-funded benefits for businesses under certain conditions, including “unforeseen industry trends.”

Good luck trying to get the specifics from the Minnesota Department of Revenue.

“By law, the department cannot confirm, comment on, or disclose private or nonpublic taxpayer return information,” Minnesota Department of Revenue spokesman Ryan Brown told Watchdog Minnesota Bureau in an email.

The latest example unfolded in Pipestone, where multinational Suzlon Rotor Corporation—“powering a greener tomorrow”—petitioned the Minnesota Department of Revenue to write off $710,000 in property, corporate and sales taxes on its idled wind turbine manufacturing plant, which was built in 2006.

“SRC hereby requests that the aforementioned repayment obligations be waived due to circumstances beyond SRC’s control, namely, unforeseen industry trends which have caused a major decline in the wind energy industry to the determent (sic) of SRC,” states a June 6, 2014, Suzlon letter to the Minnesota Department of Revenue.

Suzlon did not respond to Watchdog Minnesota Bureau inquiries, but company letters and documents made public in the process argued industry conditions “made it impossible for SRC to continue operations.” At its peak in 2008, company documents indicate, SRC employed 350 workers, but that dipped below 23 employees, the minimum number to qualify for JOBZ tax benefits, in 2013 and 2014.

“SRC’s business has suffered substantially, such that it has had to reduce staffing levels to a level that does not comply with the JOBZ program’s minimum requirements,” SRC secretary M. Hope Whitfield says in a June 2014 memo to then-Minnesota Department of Revenue Commissioner Myron Frans. “…However, over its operating history, it has far exceeded this minimum requirement.”

The company’s request did not fly with city and county officials, with hundreds of thousands of dollars of local property tax revenue at stake. State law requires revenue officials to consult with local units of government in so-called tax claw-back cases.

“We voted not to grant them that waiver because of all the subsidies they had gotten,” said Pipestone City Councilor Jim Stout.

The Pipestone County Board of Commissioners unanimously opposed the waiver, claiming in a letter to the state SRC benefited from local infrastructure, failed to update the county on future plans, paid fines for pollution violations and no longer provided job opportunities.

“It wasn’t something that we just rubber-stamped or immediately said no to,” said Sharon Hanson, Pipestone County administrator. “It was something we contemplated, and the statute says we’re to be consulted. We thought the commissioner of Revenue should have put more weight into our opinion.”

Thanks, but no thanks. In December, the Minnesota Department of Revenue overrode local government concerns and waived at least $624,531 of Suzlon’s property tax obligations.

“Repayment is not in the best interest of the state,” wrote then Revenue commissioner Frans in a letter to Suzlon. “…I hereby grant Suzlon Rotor Corporation a full waiver of tax due under MN Statute 469.319.”

The free pass from the typically hard-nosed state tax collection agency provoked local officials, who raised concerns over the secretive process.

“We got a letter back just stating that they (Department of Revenue) granted the waiver, but no reason why,” said Stout. “And then, when we called to find out, they wouldn’t tell us and said it was confidential. We just really thought it was not a good deal.”

Documents show Suzlon’s wind turbine maintenance group absorbed 10 remaining SRC employees. The turbine plant has been up for sale for two years, attracting occasional interest but no buyers.

India-based Suzlon forecasts a bleak outlook for the U.S. wind industry, in the memo to Frans.

“… The promise of a robust and sustained blade manufacturing business has not been realized, and SWECO (Suzlon Wind Energy Corporation), SRC, and the wind energy industry as a whole is unlikely to rebound from these forces at any time in the immediate future,” M. Hope Whitfield says.


Source: http://watchdog.org/198024/...

FEB 6 2015
http://www.windaction.org/posts/42139-state-waives-625k-in-taxes-for-wind-turbine-manufacturer
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