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Samsung tells Texas it wants to create 1,800 jobs with a $17 billion factory in Austin

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In return, Samsung is asking for a billion dollars in tax incentives

Illustration by Alex Castro / The Verge

Samsung has submitted paperwork to Texas officials, requesting a billion dollars in tax incentives to make Austin the future home of the company’s $17 billion chip factory, as noted by Bloomberg and reported last month by the Austin American-Statesman. In the documents, which were filed in January, the company says it plans on bringing 1,800 permanent jobs to the factory over the first 10 years, with an average starting salary around $66K.

In return, Samsung is asking for a break on its property taxes: it’s looking for a 100 percent break on its payments to Travis County for 20 years, which the company estimates would save it roughly $718 million, and a 50 percent break on the taxes to the City of Austin for five years, with an estimated $87 million. It also wants the state to subsidize its property tax payments to the school district.

It seems like Samsung is still trying to decide where to put the factory: in the documents, the company calls the project “highly competitive,” and says that “[d]ue to the higher tax cost of operating in Texas, the appraised value limitation is a determining factor. Without the appraised value limitation award, the company would likely locate the project in Arizona, New York or Korea.”

If Samsung chooses Austin, it would be expanding its existing plant there — the company already has a chip-making fab in the city, which has been there since 1997. The factory currently employs around 10,000 people, and the Austin American-Statesman notes that Samsung has recently bought 257.7 acres of land near its existing factory.

Looking for incentives from cities and states is nothing new, but Samsung is asking for quite a lot, especially compared to Tesla, which is also building a factory in Austin: the car manufacturer only got around $60 million in tax rebates from the county and school district. The two planned factories aren’t directly comparable due to differences in cost, employment numbers and salaries, and more, but Samsung’s still looking for an order of magnitude more than Tesla received. It could be that Samsung used the billion-dollar figure as an opening negotiation, but any deals being worked on don’t yet seem to be public.