Tesla to Receive Massive Tax Breaks for Giga Nevada Expansion


Tesla is set to receive massive tax breaks of up to $360 million for its expansion of Giga Nevada, which it announced in January.

Documents released Feb. 27 show Tesla will be exempt from paying payroll and property taxes for the next 10 years and will also pay reduced sales taxes for the next 20 years.

Tesla will also be eligible for $81.4 million in tax reimbursements over the next 20 years as a part of its potential agreement with Storey County, where the automaker’s Giga Nevada facility is located. Also called the Tesla Gigafactory, the company announced a plan in January to invest an additional $3.6 billion to expand Semi production. Tesla Semi started deliveries in December with Frito-Lay and parent company PepsiCo.

The abatement intends to keep Tesla in the area and give it significant tax breaks as the new investment by the automaker will create 3,000 new jobs.

However, the tax abatement plan still needs to be voted on March 2 by the Governor’s Office of Economic Development board, or GOED, which includes Nevada Gov. Joe Lombardo, Lt. Gov. Stavros Anthony and Secretary of State Cisco Aguilar, along with six other people within the private sector, the Las Vegas Review-Journal said.

The vote is set to take place just three days after the details of the potential abatement plan were made public. A nondisclosure agreement or NDA was put into place, and some were critical of Tesla’s use of an NDA to keep the details private.

State Sen. Dina Neal, D-4, said NDAs “shouldn’t protect large corporations and prevent the legislature and the public from understanding the full impact of taxes that would be abated to make an economic development deal.”

On Feb. 27, after details of the abatement package were released, Neal continued to criticize the short timeframe between the vote and the tax breaks being made public, calling it “insufficient.” Neal’s concerns are based on the fact there may not be adequate time to see how this massive abatement package could affect other things, like housing supply, public schools and safety, and “other vital government services in the region,” she said in a statement.

Tesla received nearly $1.3 billion in incentives in 2014, spread over 20 years. The first round of abatements was said to have a “positive” impact on the region, according to Storey County Manager Austin Osborne.

“We believe under the first Gigafactory that those abatements were beneficial to the region in northern Nevada. They provided jobs, employment and careers and significant regional fiscal impacts that are positive,” Osborne said.

We thank Teslarati for reprint permission.

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