Missouri offers tax credits to woo Bombardier

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Missouri's state senate has approved a $240 million tax credit programme that it hopes will persuade Bombardier to build a $395 million CSeries 110/130-seat airliner assembly plant at Kansas City International Airport, a decision the airframer could make as early as this summer.

The bill now goes back to the Missouri House of Representative to reconcile differences and then on to the governor for final approval.

bombardier cseries
 © Bombardier

Drafted specifically with Bombardier in mind, the legislation adds a new "mega-project" designation to a tax credit programme that provides up to $240 million in tax credits over eight years to projects that invest $300 million in the state and guarantee creation of at least 1,000 jobs. It includes a repayment mechanism that will assure all tax credits issued are paid back to the state with interest, probably as a royalty on each aircraft sold. The interest rate for the repayment will be about 5.1%.

This arrangement contrasts sharply with earlier versions, which had allowed up to $880 million in tax credits over 22 years. That proposal drew some criticism, with opponents posted negative video clips on YouTube claiming that such a plan is "kind of like maxing out the state's credit card to the Canadians".

the Kansas City aviation department says: "Scaling back the state's commitment was critical to picking up the support needed to assure the bill's passage."

Bombardier is expected to decide on the site of the plant by this summer. It is considering several US sites for work-share because of the relative strength of the Canadian dollar, but has said it sees Mirabel, Quebec as the "preferred site" for final assembly. Missouri's aviation department observes: "As the company's home country, Canada is expected to put together an attractive deal."