General Electric has announced that it has selected the city of Boston as the next location for the company's corporate headquarters.
GE is moving from Connecticut, which was once a low-tax haven but now has an increasingly hostile business climate over recent years.
Jeff Immelt, the CEO of GE, began to entertain offers to relocate the company's corporate headquarters last summer after the legislature of Connecticut obtained more tax hikes equivalent to $1.3 billion, which is the fifth increase since the year 2011.
"Connecticut economy continues to struggle as other states offer more opportunities and a better environment for business growth," noted GE in a statement.
According to Immelt, the company chose Boston among 40 other locations, with GE being pursued by Rhode Island, Georgia and New York.
However, GE ultimately chose Boston due to the fact that Massachusetts spends more on research and development compared with any other region worldwide, and because Boston attracts a diverse and technologically-fluent workforce which is focused on solving the many challenges of the world.
It also helps that GE will be getting a package of incentives from Boston that carries a value of as high as $145 million. In addition, Massachusetts holds the lowest tax rates in the Northeast region outside of New Hampshire, which does not have urban cultural amenities that young executives and techies are attracted to.
Massachusetts has been working to shed its image of a high-tax locale through the reduction of its corporate rate from 9.5 percent to 8 percent and flat income tax from 5.3 percent to 5.15 percent in 2008. Over the same period, in comparison, Connecticut has increased its corporate rate from 7.5 percent to 9 percent and its top income tax rate from 5 percent to 6.99 percent.
"We are excited to bring our headquarters to this dynamic and creative city," the company said in the press release that announced its move to Boston.
According to GE, the company will suffer no material financial impact from the transfer of location of its corporate headquarters. In addition to the package of incentives that it will be receiving from the city of Boston and the state of Massachusetts, the company will also receive aid in offsetting the costs of the relocation. GE will also be selling its offices in Fairfield, Conn., and at 30 Rockefeller Plaza in New York City.
