Exact Sciences to return $61,000 in tax credits

MADISON, Wis. (AP) — Madison-based medical diagnostics firm Exact Sciences Corporation is the unnamed company highlighted in an audit that revealed it received about $61,000 in tax credits for jobs created outside of Wisconsin, an open records request by The Associated Press revealed.

Hours after the AP reported the name of the company Thursday, Exact Sciences said as “good corporate citizens” it would repay the money to the state.

The Legislative Audit Bureau did not name Exact Sciences and Wisconsin Economic Development Corporation CEO Mark Hogan refused to name it during an interview the day the audit came out last week. But after consulting with its legal counsel after the AP request, WEDC said on Wednesday that Exact Sciences was the company.

“As good corporate citizens, we appreciate the support from WEDC and the state of Wisconsin,” Exact Sciences spokeswoman Cara Connelly said in an email. “Based on the newly published results of the LAB audit we pledge to return $61,000 to the state.”

WEDC spokesman David Callender declined to comment.

WEDC is in charge of job creation for Wisconsin and this year approved more than $3.1 billion a year in tax credits, grants, loans and bonds. Its handling of those awards, especially its tracking of companies in default, has been under scrutiny for years. WEDC is also in the spotlight for negotiating the contract with Foxconn Technology Group for a project that could yield the company more than $4 billion in state and local tax credits.

The most recent WEDC audit found continued problems with how it tracks job creation and awards to companies. Two of the cases highlighted involved Exact Sciences, which went unnamed, and another anonymous company that received $462,000 in tax credits even though it lost 17 jobs.

That company, as WEDC revealed in response to AP, is national retail chain Walgreens. Hogan also initially declined to name that company last week.

Bill Lueders, president of the Wisconsin Freedom of Information Council, said it was good that WEDC released the names of the companies in response to the open records request, but it was “deeply troubling” that Hogan initially refused to do so.

“That never should have happened,” Lueders said. “Given the many known problems involving the agency he heads, it should be crystal clear that the public is entitled to maximum transparency when it comes to these awards.”

WEDC is in the process of calculating the total amount of tax credits given to Walgreens that will be revoked, Callender said.

The audit did not reveal an issue that was unknown to WEDC, Callender said. The audit’s findings were in response to WEDC’s own evaluation which determined Walgreens had lost jobs, he said.

In the case of Exact Sciences, WEDC provided $61,100 in enterprise zone credits for creating 261 jobs filled by individuals who lived in 36 states not contiguous with Wisconsin.

Exact Sciences makes Cologuard, a colorectal cancer diagnostic test that can be used at home to screen for DNA biomarkers in stool. It was approved by the U.S. Food and Drug Administration in 2014, and during the first three months of this year more than 2 million patients had used it.

Exact Sciences entered into a contract with WEDC in 2014 that could net it $9 million in tax credits. To date, it has qualified for $4.3 million. In 2017, it was awarded $1 million. Of that award, about 6%, or $61,000, were for the 261 jobs created outside of Wisconsin. It had also created 795 jobs in the state.

The contract required Exact Sciences to create 754 jobs in Wisconsin by 2020 to get the full amount, company spokeswoman Connelly said. The company has already surpassed that number and has 1,607 qualifying employees in the state, she said.

Exact Sciences has two labs in Madison and is planning on building a third site. It has 2,300 employees, including 1,800 in the Madison area.

Connelly said the out-of-state jobs noted in the audit were likely professional medical representatives or members of the company’s sales force.

The location of jobs for purposes of qualifying for tax credits has been an issue, especially since the Foxconn contract. That deal requires that the Foxconn jobs be located in Wisconsin to qualify for the tax credits. But the audit faulted WEDC for awarding credits to companies like Exact Sciences that hire people who do not work in Wisconsin.

Hogan said last week the law permits the awarding of credits for creating jobs out of state and that flexibility is needed to attract and retain companies.

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