Canon U.S.A. could have to repay tax breaks because of job cuts at its Melville headquarters, letter says
The entrance to Canon's headquarters in Melville. Credit: Newsday / Alejandra Villa Loarca
Canon U.S.A. Inc. could lose some of the tax breaks it receives from Suffolk County because of recent jobs cuts at its Melville headquarters, according to a letter obtained by Newsday.
The county’s Industrial Development Agency, in a Wednesday letter to a Canon executive, said the company agreed on Feb. 1 "to create and maintain at all times at the facility: 1,081 full-time equivalent employees."
If a smaller number of people are employed that "will be considered a recapture event," where the IDA could claw back some of the tax savings received this year by Canon, states the letter from agency attorney William D. Wexler to company executive Amy E. Newman.
"We’re in communication with the IDA and a meeting has been set for early August," Newman said Friday.
The IDA had requested the meeting in its letter, along with a written explanation about the layoffs.
The agency’s action came after Newsday reported this week that Canon had eliminated 100 to 150 jobs, or between 9% and 14%, of the workforce at its 696,000-square-foot office on Walt Whitman Road.
The layoffs took place to "streamline operations and promote efficiency in order to achieve the necessary levels of performance that are required to meet our targets and remain competitive," Isao "Sammy" Kobayashi, the company’s CEO and president, said on Monday.
The downsizing occurred six months after the IDA awarded more tax savings to Canon when it threatened to close the office and have employees work from home permanently. The new aid package totals $7 million over the next 12 years.
In 2007, the company received $100 million in incentives from the county and state to build the $500 million office instead of moving out of state.
Kelly Murphy, the IDA’s CEO and executive director, said on Friday that it routinely sends such letters to clients that may have fallen out of compliance.
If the IDA was to claw back benefits, it would involve a sales tax exemption of up to $568,388 that was granted on the purchase of materials and equipment for $8.4 million in upgrades to the Canon office. A second round of property tax savings doesn’t start until next year, she said, adding any recaptured tax money would be sent to the affected governments.
"We look forward to meeting with [Canon officials] to understand the situation and how they plan to meet their obligations to the agency and the county’s taxpayers," Murphy said in an interview.
Canon U.S.A. Inc. could lose some of the tax breaks it receives from Suffolk County because of recent jobs cuts at its Melville headquarters, according to a letter obtained by Newsday.
The county’s Industrial Development Agency, in a Wednesday letter to a Canon executive, said the company agreed on Feb. 1 "to create and maintain at all times at the facility: 1,081 full-time equivalent employees."
If a smaller number of people are employed that "will be considered a recapture event," where the IDA could claw back some of the tax savings received this year by Canon, states the letter from agency attorney William D. Wexler to company executive Amy E. Newman.
"We’re in communication with the IDA and a meeting has been set for early August," Newman said Friday.
The IDA had requested the meeting in its letter, along with a written explanation about the layoffs.
The agency’s action came after Newsday reported this week that Canon had eliminated 100 to 150 jobs, or between 9% and 14%, of the workforce at its 696,000-square-foot office on Walt Whitman Road.
The layoffs took place to "streamline operations and promote efficiency in order to achieve the necessary levels of performance that are required to meet our targets and remain competitive," Isao "Sammy" Kobayashi, the company’s CEO and president, said on Monday.
The downsizing occurred six months after the IDA awarded more tax savings to Canon when it threatened to close the office and have employees work from home permanently. The new aid package totals $7 million over the next 12 years.
In 2007, the company received $100 million in incentives from the county and state to build the $500 million office instead of moving out of state.
Kelly Murphy, the IDA’s CEO and executive director, said on Friday that it routinely sends such letters to clients that may have fallen out of compliance.
If the IDA was to claw back benefits, it would involve a sales tax exemption of up to $568,388 that was granted on the purchase of materials and equipment for $8.4 million in upgrades to the Canon office. A second round of property tax savings doesn’t start until next year, she said, adding any recaptured tax money would be sent to the affected governments.
"We look forward to meeting with [Canon officials] to understand the situation and how they plan to meet their obligations to the agency and the county’s taxpayers," Murphy said in an interview.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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