RALEIGH, NC – Dell Inc. and the state of North Carolina are wrangling over about $6 million in tax breaks the company received for building its PC manufacturing facility, which will close in January, in Winston-Salem.

The company (Nasdaq: DELL) agreed to repay more than $26 million in local grants and $1.5 million in state money, but said it met requirements for the years it was in operation and will keep that portion of the money.

NC Gov. Bev Perdue said the state will challenge Dell on the issue. She said the state should “Get back every red cent.”

However, the Governor’s aides later said that Dell may be entitled by law to keep some of the incentives received while it was operating.

Dell operated the facility since 2005 but said it will close it in January, laying off its 900 workers.

The affair is likely to heighten debate over offering state and local tax breaks and other incentives offered to lure large companies.

The original Dell incentives package was challenged in court, although the challenge failed.

Some analysts say the state would be better served by investing in small business development such as through the recently announced innovation fund.

Economic development officials, however, have long maintained they must offer such incentives to compete successfully with other states and regions.

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