Nike might lose a tax break following its July 4 sneaker controversy

Nike is paying a heavy price for its controversial Fourth of July sneakers. The Arizona government has rescinded a 1-million-dollar tax break it had originally promised Nike for its planned manufacturing center in the state.

The brand had intended to release a version of its Air Max 1 Quick Strike featuring Betsy Ross' original American flag design from 1770 for Independence Day this year, yet pulled the product ahead of its release after brand ambassador Colin Kaepernick told Nike that he felt the design was offensive due to the flag's link to slavery.

The Air Max 1 Quick Strike Fourth of July was distributed and ready to retail for 120 dollars through Nike's e-commerce channel, however the brand is no longer selling the product.

Arizona governor Doug Ducey was not in favor of Nike's decision to pull the product, stating on Twitter that the decision was disrespectful to Betsy Ross' contribution to the country, and is therefore withdrawing the state's tax incentive.

“Instead of celebrating American history the week of our nation’s independence, Nike has apparently decided that Betsy Ross is unworthy, and has bowed to the current onslaught of political correctness and historical revisionism," the governor wrote on Twitter.

“Nike has made its decision, and now we’re making ours," Ducey continued. "I’ve ordered the Arizona Commerce Authority to withdraw all financial incentive dollars under their discretion that the State was providing for the company to locate here. Arizona’s economy is doing just fine without Nike. We don’t need to suck up to companies that consciously denigrate our nation’s history."

Despite the governor's claims, the city of Goodyear, AZ, which is set to house Nike's manufacturing facility, stands by its promise to the brand.

“We will honor the commitment we made in our agreement,” the city's mayor, Georgia Lord, said in a statement published in local newspapers. “It has been a focus of the Goodyear City Council to build a strong economy for years to come and we will continue to work hard to bring the kind of high quality jobs that our residents deserve.”

Image: courtesy of Nike