Illinois has pledged $12 million over 10 years to eBay in exchange for the creation of 360 jobs in downtown Chicago, Gov. Pat Quinn's office said Friday.
EBay last year acquired Braintree, a Chicago payment processor for smartphones and tablets. Now eBay is agreeing to keep Braintree and its 140 jobs in the city, as well as create more jobs.
Braintree said it will move from 111 N. Canal St. to a 60,000-square-foot space in the Merchandise Mart and invest $24 million in the state. The company pledged to create 216 full-time jobs by 2016 and an additional 144 in 2017.
"EBay will join a burgeoning community of technology companies that was built in part by the governor's visionary support for the 1871 digital hub and other ventures," Adam Pollet, director of the Department of Commerce and Economic Opportunity, said in a statement.
The deal allows eBay to claim a state tax credit on its corporate income taxes under the Economic Development for a Growing Economy, or EDGE, program. Dave Roeder, a spokesman for the Commerce Department, said the state is pledging incentives only for the jobs to be created.
Lawmakers have criticized the department for approving deals that allow companies to claim incentives without creating a single job. Some deals also allow companies to lay off workers, a practice called "normal attrition." EBay's agreement does not include normal attrition.
Over the years, some companies in the program have carved out special deals that also allow them to keep their employees' personal income tax withholdings instead of forwarding them to the state.
So far, nine companies in the program have such a deal, including Motorola Mobility, Ford and Navistar.
That practice, which requires legislative approval, came under heavy criticism last year when a half-dozen companies, including agricultural giant Archer Daniels Midland, asked lawmakers to be added to the special list. Lawmakers denied the requests and declared a moratorium on the tax deals. EBay is not getting one.
In an effort to revamp EDGE, the House this spring approved a bill sponsored by Speaker Michael Madigan that would limit the amount of money the Commerce Department can offer for jobs that are only retained, not created.
The bill requires companies asking for the special break to create jobs in an "area of high poverty or high unemployment," and it also requires them to publicly disclose their state income tax liability in exchange for incentives.
Madigan's bill could be taken up by the Senate in November, but it would likely face opposition from business groups.
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