Posted November 08, 2018 07:53:00 US retail giant Staples is making an $800 million tax relief offer to the US Treasury to help it pay down a $1 billion deficit, the Wall Street Journal reported on Wednesday.
The company will also receive $400 million in tax credits from the government over a 10-year period.
The deal, announced Tuesday, also provides Staples with another $200 million in cash to help offset its tax liabilities, the WSJ reported.
The Treasury has previously said it expects to take the company to court over the deal, which was announced on Tuesday, although it could also face legal challenges over the tax treatment of the payments.
The offer, which could boost Staples’ stock price, was announced at a conference in the US capital city of Washington.
It comes after the company announced it had reached a $9 billion deal with Congress to resolve a fiscal cliff deal.
The move was seen by investors as a signal that Congress was willing to extend tax relief, but some have questioned whether the tax relief would actually be enough to close the deal.
A Treasury spokesperson told the WSJD the deal was announced as part of a larger package to support the US economy.
The deal was signed by US President Donald Trump.
“I am very pleased to announce that we have reached a landmark agreement to avert a looming fiscal cliff,” Mr Trump said.
“The deal has already enabled the US to reduce its $3.6 trillion budget deficit in 10 years and has allowed the economy to expand for the first time in over a decade.”
This deal will help us make good on our promises to the American people and the American workers,” he added.
Earlier this year, Congress passed a bill that extends for 10 years an existing tax break for companies that use overseas factories for certain products and services, including those made by overseas companies.
It was signed into law by President Donald J Trump in May, but the extension expired at the end of September.