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Grants, tax relief continue for Dell
2008-04-11
Computer maker Dell Inc. will keep getting more than $300 million in state and local grants and tax breaks in North Carolina after the state's Supreme Court declined Friday to hear a lawsuit challenging the incentives. The North Carolina Institute for Constitutional Law, a taxpayer advocacy group, sued the company and state and local governments in 2005, saying the subsidies violated the U.S. and North Carolina constitutions because they primarily benefit Dell, rather than a general public purpose. In exchange for the payments and tax breaks, which are spread over many years, Dell promised in 2004 to create at least 1,500 jobs at its plant near Winston-Salem and to invest at least $100 million in the area over the following 15 years. The agreement could result in Dell not paying any state corporate income tax for more than 30 more years. The state Court of Appeals rejected the case last fall, noting that the state Supreme Court had upheld state officials' right to grant taxpayer-funded incentives. The institute then appealed the case to the state Supreme Court. Dell's 750,000-square-foot operation opened in the fall of 2005. Round Rock, Texas-based Dell could get up to $278 million in state grants and tax breaks if it makes good on its promise, plus a local package worth $37.2 million that covers taxes and startup and other costs. "While we are disappointed by the Supreme Court's decision, we remain committed to enforcing constitutional limitations on government, including limits on government spending," Jeanette Doran, an attorney for the institute, said in a statement.
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