State gives Wayfair $31 million in tax breaks for 3,300 jobs in Boston and Pittsfield
The fast-growing online retailer Wayfair Inc. landed $31 million in tax incentives from the state Thursday to help the company add thousands of jobs in Boston and hundreds in Pittsfield.
The Economic Assistance Coordinating Council approved a plan to dole out the incentives to the home-goods seller over 10 years. In return, Wayfair pledged to add a total of 3,300 jobs.
A spokeswoman for the council said this is the state’s second-biggest tax-credit award since 2010. The largest was a $46 million package pledged to MassMutual earlier this year in return for its decision to add 1,500 jobs in Springfield and up to 1,000 in Boston.
(General Electric was awarded $125 million in grant money in 2016 as part of a plan for a state agency to acquire the two Fort Point buildings where GE will move.)
Boston-based Wayfair had already said it plans to eventually employ at least 10,000 people here, approximately doubling the 5,000-plus workforce at its approximately 650,000-square-foot Copley Place headquarters. Early next year, Wayfair will begin expanding into nearly 400,000 square feet of offices it has leased at the 500 Boylston/222 Berkeley complex, where there’s enough room for as many as 4,000 employees.
On Thursday, Wayfair announced its third Back Bay location: 300,000 square feet at 10 Saint James Ave. The offices in that building could eventually accommodate up to 3,000 workers, a Wayfair spokeswoman said.
The new Back Bay locations will accommodate a variety of headquarters-type jobs, ranging from engineering to merchandising to operations.
The company is also planning to open a call center in Pittsfield, with about 300 jobs. Wayfair is still in lease negotiations there but plans to open the center in mid- to late 2019. The average annual salary for the Pittsfield jobs would be $37,000, according to documents filed with the state, compared with $120,000 for the Boston jobs tied to the incentive package.
Wayfair CEO Niraj Shah referenced his upbringing in Pittsfield in a prepared statement the company released Thursday. Shah, his spokeswoman said, was thrilled about bringing jobs to the community where he grew up.
Wayfair reported more than $6 billion in revenue in the 12 months that ended Sept. 30, but it’s still losing money. If those losses continue, it could hamper Wayfair’s ability to fully capitalize on the tax incentives.
Of the $31.4 million in tax credits that Wayfair is on track to get over 10 years, $10.3 million is deemed “refundable” and will be essentially reimbursed as cash.
The rest can be counted against the company’s corporate tax liability with the state. If Wayfair fails to meet its hiring goals, it would risk being decertified by the state, which would cut off future tax benefits. These credits generally ramp up over time, though, starting with just $250,000 in 2019 and growing to $5.1 million in 2029.