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Home / Commercial Construction / WEDC decides Exact Sciences doesn’t owe state anything

WEDC decides Exact Sciences doesn’t owe state anything

Crews overseen by J.H. Findorff & Son have been building a new laboratory building for the medical-diagnostics firm Exact Sciences Corporation at 650 Forward Drive on Madison’s west side. Wisconsin's economic development agency has decided that the medical-diagnostics company is under no obligation to repay government tax credits, even though Exact Sciences has itself pledged to return $61,000 awarded for jobs that were created in other states. The new laboratory building, scheduled to open this year, is expected to lead to the creation of 250 jobs over five years and bring the company’s capacity to process Cologuard tests up to about 4.5 million a year. (Staff photo by Dan Shaw)

Crews overseen by J.H. Findorff & Son have been building a new laboratory building for the medical-diagnostics firm Exact Sciences Corporation at 650 Forward Drive on Madison’s west side. Wisconsin’s economic development agency has decided that the medical-diagnostics company is under no obligation to repay government tax credits, even though Exact Sciences has itself pledged to return $61,000 awarded for jobs that were created in other states. The new laboratory building, scheduled to open this year, is expected to lead to the creation of 250 jobs over five years and bring the company’s capacity to process Cologuard tests up to about 4.5 million a year. (Staff photo by Dan Shaw)

By SCOTT BAUER
Associated Press

MADISON, Wis. (AP) — Wisconsin’s economic-development agency has decided that the medical diagnostics company Exact Sciences Corporation doesn’t have to repay the state any of the tax credits it received for creating jobs elsewhere, even though the company itself had promised to return $61,000.

The Wisconsin Economic Development Corporation told the president of Exact Sciences on June 11 that it has run new calculations for the company’s job creation and found that Exact Sciences is under no obligation to reimburse the state for any previously awarded tax credits. Exact Sciences provided the letter to The Associated Press on Tuesday after the AP inquired about the status of the repayment.

Exact Sciences in May said it would return $61,000 worth of enterprise-zone tax credits that, according to a state audit, had been paid to the company in return for the creation in 2017 of 261 jobs. The audit said the jobs were supposed to be in Wisconsin but were in fact created elsewhere.

Exact Sciences responded by saying it had created more than enough jobs in Wisconsin that year to fulfill the terms of its incentives contract, according to the company spokeswoman Cara Connelly. Connelly said that after the state audit came out, Exact Sciences asked the WEDC to recheck its job numbers.

WEDC tallied up the tax credits the company had received through the end of 2018 and found that Exact Sciences had exceeded its target number for job creation in Wisconsin by 352 jobs, WEDC CEO Mark Hogan said in the letter to Exact Sciences President Kevin Conroy.

Because of that, the company owes nothing in back tax credits, Hogan said.

“We were pleased and we thought that would be the case,” said Connelly of Exact Sciences.

Exact Sciences makes Cologuard, a colorectal-cancer diagnostic test that can be used at home to detect DNA biomarkers in stool. It was approved by the U.S. Food and Drug Administration in 2014. More than 2 million patients used it during the first three months of this year.

Exact Sciences has two laboratories in Madison and has construction plans for a third site. It has 2,300 employees, 1,800 of whom work in the Madison area.

Exact Sciences’ contract with the state, signed in 2014, called on the company to create up to 758 full-time jobs by 2020. Through the end of 2018, Exact Sciences had created 1,472 jobs that were being filled by Wisconsin residents. Of those, 1,306 met the requirements laid out in the state’s tax incentives, Hogan said.

Even without counting the jobs created outside Wisconsin, Exact Sciences was in compliance by the end of 2018 with the terms of the state’s job-creation tax credits, Hogan said.

Questions about where companies have been creating jobs in return for receiving tax credits have abounded in Wisconsin lately. That’s especially true for the components manufacturer Foxconn Technology Group, which stands to receive more than $4 billion worth state and local tax credits if meets certain hiring and spending goals.

The Foxconn deal states that only jobs created in Wisconsin can count toward meeting requirements laid out by the state’s tax credits. For other projects, officials have allowed out-of-state jobs to be counted.

Connelly said Exact Sciences promised last month to return incentive money just in case there was a mistake or any doubt concerning its job numbers. But she said Exact Sciences was confident all along that the terms of the deal had been met and that no tax credits had been awarded improperly.

WEDC is in charge of job creation for Wisconsin. Its handling of its duties, especially its tracking of companies that have failed to live up to their promises, has been under scrutiny for years.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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