Husco may have to pay back tax credits

Company has claimed almost 30% of 2013 award

Husco International may have to pay back some of the tax credits it has claimed from a 2013 award after announcing it will end off-highway production at its Waukesha facility.

Gov. Scott Walker addresses employees at the 2013 announcement of an $880,000 award for Husco International. Source: Office of Gov. Scott Walker
Gov. Scott Walker addresses employees at the 2013 announcement of an $880,000 tax credit award for Husco International. (Source: Office of Gov. Scott Walker)

The Waukesha-based company was awarded up to $880,000 in tax credits by the Wisconsin Economic Development Corp. to support a multi-year, $45 million capital expansion project at its Waukesha and Whitewater facilities.

The company was eligible for $256,671 in credits to date, according to WEDC.

The award required the company to create 160 jobs and invest $45 million to receive the full credits. The company has invested $22 million and 30 new jobs have been created through the end of 2014, according to WEDC’s latest performance report for the company.

The contract called for the jobs to be created between the start of 2013 and end of 2015 and then to be maintained for another two years.

The company has claimed $145,000 in credits, according to a company spokesperson, with about $61,000 of those related to job creation.

Companies that receive awards from WEDC are contractually required to meet objectives related to job creation, retention or capital investment. Those that do not fulfill contractual obligations are subject to clawbacks or denial of tax credit claims.

Husco announced Thursday it will end off-highway assembly, machining and maintenance operations at its Waukesha facility, shifting the work to Whitewater and Maquoketa, Iowa. The move will take place in phases starting in September and is expected to be complete by early 2017, with the potential for 100 positions to be eliminated.

The situation is complicated by the fact that Husco is maintaining its automotive-related production in Waukesha. That includes increasing a planned investment in the facility from $20 million to $25 million.

In a statement, WEDC said the company kept the agency informed of its plans for the Waukesha facility. WEDC will monitor the company’s employment to determine what impact it will have on the tax credits the business has received.

Husco’s capital investment in the Waukesha facility will remain in place, according to a company spokesperson. The company did claim a job creation-related credit in 2013 and is working with WEDC to determine the next steps. No job related credits were claimed in 2014 or 2015.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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