Ohio proposes $71M tax credit for Honda’s new battery plant, EV hub
State leaders are planning to consider a proposed $71.3 million job creation tax credit for Honda, based on the company’s recent announcement for an investment of up to $4.2 billion in Ohio-based projects.
The Ohio Tax Credit Authority will consider the proposal, marked as a 1.871% credit over 30 years, at an upcoming meeting.
The job creation tax credit is performance-based and would be subject to reviews of Honda’s job creation and payroll commitments. The company would be required to submit annual reports to verify their progress.
On Tuesday, Honda announced it would create a $3.5 billion electric vehicle battery plant in Fayette County as part of a joint venture with LG Energy Solution.
Along with the plant, Honda recommitted its presence in Ohio with a plan to re-tool its existing automotive manufacturing plants in order to transition to electric vehicle production. That would be a $700 million project.
Both projects combined are expected to create 2,500 new jobs.
The Ohio Department of Development also said it is working with the state legislature to invest $85 million in local water and transportation infrastructure upgrades to “ensure the success of the project and benefit the local communities.”
Chris Abbruzzese, a spokesperson for Honda said in a statement, “We have been in discussions with a wide range of government entities on a number of topics and it would be inappropriate at this time for us to comment on what various government entities are considering in relation to infrastructure improvements and other support to the project. Honda is grateful for our longstanding 45-year partnership with the state of Ohio and local communities.”
Matt Englehart, JobsOhio communications manager, said the private economic development organization also plans to provide grant assistance for the Honda projects, which will not be made public until after they go into effect.
“It is important to keep existing companies like Honda growing in Ohio, which will come with the retooling. Pursuing new opportunities, such as the joint venture between Honda and LG Energy Solution is vital as it will bring a massive investment and job creation in Fayette County while building future auto manufacturing in Ohio,” said Englehart.
Critics of job creation tax credits have called on the state to double down on its efforts to ensure the investments are targeted and working.
Zach Schiller, research director for Policy Matters Ohio, has said state incentives should also be tied to community impacts, such as local hiring practices.
The state development department said, for every $1 dollar Ohio plans to invest in incentives, Honda plans to invest at least $50.