Michigan Offering Refundable Tax Credits For Battery Companies
GM and Chrysler received $13.4 billion in emergency loans to help keep them afloat. The loans were given even though there was tremendous controversy around it. Governor Jennifer Granholm of Michigan decided that she did not want to take a chance for the automotive companies to revive themselves with just federal loans so she decided to offer major tax incentives to battery firms. If these companies are lured into Michigan, it makes it easier for automotive companies to use their battery technology directly.
This is especially important since hybrid and plug-in vehicles are becoming a heavy focus for the big three automotive companies. General Motors is investing a large amount of money into the development of the Chevy Volt. Ford has several hybrid vehicles being manufactured such as the Fusion and the Escape. And Chrysler has two SUV hybrids: the Durango and the Aspen.
Lithium ion batteries are extremely important for any hybrid vehicle. “It is imperative that Michigan possess this technology to keep Michigan the center of car manufacturing,” stated Senator John Pappageorge, member of the Michigan State Senate. The U.S. as a whole is lacking battery technology companies according to Granholm. It is not just the state. The batteries will store energy in cars, homes, and businesses too.
“All of that we want to make a big play for Michigan,” stated Granholm. “We want it to be an American solution produced by American workers.”
The state of Michigan is offering the battery companies refundable tax credits. These are more than just tax breaks. Refundable tax credits is when the state writes the companies a check if the credits exceed tax liabilities. The Senate passed the bill 31-3 and the House 94-0. Before the bill passed, the cost of the bill was scaled back by nearly $200 million.This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry