Rockwell Collins, which received millions in Iowa taxpayer dollars last year, announces it will move its executive offices to Florida

Illustration by Jordan Sellergren.

Rockwell Collins will move its executive management division from Cedar Rapids to Florida as part of a new corporate structure following its planned merger with United Technologies Corp. (UTC), it was announced on Thursday. The company has been headquartered in Cedar Rapids since it was founded in 1933 as Collins Radio.

It was not announced how many jobs will be lost in Cedar Rapids as a result of the move, but in a press release, the company said the restructuring after the merger “employee relocations are expected to be minimal.” According to the press release, the avionics and mission systems divisions of the merged company will remain in Cedar Rapids.

Rockwell is the largest employer in Cedar Rapids, with approximately 8,000 employees. Its merger with UTC should be concluded this year, according to the company.

The announcement of the move came one week after the Iowa Department of Revenue (IDR) released its annual report on the state’s Research Activities Credit (RAC), a refundable tax credit. In 2017, Rockwell received more money through the RAC — $13.9 million — than any other company.

Through other tax breaks, Rockwell paid no state taxes to Iowa in 2017, even though the company reported a profit of $705 million in fiscal year 2017. The RAC is a refundable tax credit, which means any portion a company doesn’t use to reduce its tax liability is paid directly to the company. Iowa paid the entire $13.9 million Rockwell claimed through the credit last year directly to the company. That payment to Rockwell was one-fifth of the total amount claimed under the RAC in 2017.

The RAC was created in 2005, and at the time, legislators argued it was needed to encourage small, start-up companies to engage in research in Iowa. But almost all the money that has been paid out through the credit has gone to large corporations such as Rockwell and Deere & Co.

The state did not require an annual report on RAC claims until 2009. According to those reports, Rockwell received $91.3 million through the credit, between 2009 and 2017.

“Which of these subsidies pay off for the state’s taxpayers?” Mike Owen, executive director of the nonprofit Iowa Policy Project, asked in a press release after this year’s IDR report was published. “We don’t know — but we do know that the [RAC] program is very costly, and getting more costly, and the vast majority goes to very large, very profitable corporations that would do research anyway, with or without a subsidy.”

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