Manor School District reaches tax accord with Samsung [Austin American-Statesman]
(Austin American-Statesman (TX) Via Acquire Media NewsEdge) Dec. 18--Manor Independent School District has approved a tax limitation agreement with Samsung Austin Semiconductor that will enable the chipmaker to save $83.6 million in school property taxes over 13 years on its expansion to its Austin chip factory.
Samsung applied for the property tax limitation to cover its proposed $4 billion upgrade to its massive factory in Northeast Austin, which lies within the Manor district.
The new agreement is separate from a 2005 incentives agreement that the school district signed with the chip-maker shortly before it began to build its major factory in Austin. The city of Austin and Travis County signed 20-year agreements with Samsung at that time and those remain in place.
The agreement under Chapter 313 of the state tax code caps the value of Samsung's latest plant investment at $80 million a year for the school district's maintenance and operations tax levy. That cap goes into effect in 2015 and extends through 2022.
The agreement, however, does not affect the district's tax levy for servicing its debt.
Samsung estimates it has made about $11 billion in plant investments in Austin since 1996, with most of that coming after 2005 when it built its major factory here, called the Main Fab. With the latest project to be completed in 2013, that investment is expected to climb to $15 billion. Samsung's Central Texas investment is one of the largest private foreign investments in U.S. history.
The semiconductor company employs about 2,500 workers in Central Texas, of whom about 2,300 work in the factory complex.
The primary purpose of the new investment is to expand the Austin factory's capacity to manufacture advanced low-power processor chips for mobile devices including smartphones and tablets. The major customers for those chips are Apple Inc. and Samsung itself, tech industry analysts say.
While the company will save a lot in school taxes, it also will pay a lot. The consultant's report estimates Samsung will pay the school district $66.2 million in property taxes related to the expansion project over the next 15 years.
Samsung spokeswoman Catherine Morse called the agreement "a win-win" for both the company and the school district.
Mike Rollins, president of the Greater Austin Chamber of Commerce, said the deal is a good one for Austin.
"We are very pleased that Samsung has shown the confidence to make such a significant investment in their semiconductor operations here," he said. "We believe it is good for Austin and for Austin jobs. And it is a win-win for Samsung and the Manor school district because it provides additional tax base."
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