Details on Nevada's incentive package for Tesla

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Updated: 9/08 3:37 pm

CARSON CITY, Nev. (AP) — Nevada has assembled a package of tax breaks and incentives worth up to $1.3 billion over 20 years to lure Tesla Motor Inc.'s new $5 billion battery factory to an industrial park near Reno. The state Legislature will have to approve the package. Here's what the deal with the electric car maker includes:

WHAT TESLA RECEIVES:

— 100 percent abatement of sales and use taxes for 20 years, worth up to $700 million.

— 100 percent abatement of real property tax, personal property tax and payroll taxes for 10 years. Together the abatements are valued at $675 million to $1.1 billion over 20 years, depending on the size of Tesla's investment.

— Tax credits worth about $195 million over 20 years, including a jobs transferable tax credit of $12,500 per permanent employee, worth $70 million, and an investment tax credit of $125 million.

— The tax credits (about $195 million) are separate from abatements ($675 million to $1.1 billion) for a total package worth about $865 million to $1.3 billion.

— Nevada will purchase the right of way to USA Parkway to connect Interstate 80 south to U.S. Highway 50 east of Carson City and improve access to the site.

— Minor revisions in state law to ensure Tesla can sell its cars through company-owned dealerships.

WHAT NEVADA RECEIVES:

— An estimated economic impact of roughly $5 billion a year for the next 20 years for a total of $100 billion. That's equal to a bit more than 3 percent of the state's gross product.

— Some 6,500 permanent jobs averaging $25 per hour at the Tesla factory and a peak of 3,000 construction jobs leading to the plant's scheduled 2017 opening. About 22,000 projected new jobs resulting directly and indirectly from the plant over two decades.

— Tesla will make it a priority to hire Nevada residents, especially veterans.

— An estimated $1.9 billion in tax revenue for all levels of government, state, local and school districts over 20 years.

—Tesla will make a $37 million contribution to K-12 education — approximately $7.5 million a year for five years.

— Tesla will contribute $1 million to battery research at UNLV.

WHAT NEVADA CUTS:

— The state's existing film tax credit would be cut from $80 million to $10 million.

— A home office credit used by insurance companies would end Jan. 1, 2016, to save $125 million.

— The cuts totaling $195 million offset the tax credits Tesla is to receive.

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Source: Steve Hill, executive director of the Governor's Office of Economic Development

 

©2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Paladin - 9/5/2014 8:35 AM
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This is a major win for Nevada and the Reno area. We stole this company from kalifornia, or rather they drove it out of their state because of OVER regulation and OVER taxation. We have a much better business climate and we need this diversification to offset the lessening impact of the gaming tax revenue. This state will never again see gaming fund all our needs like it once did. With Reno's great location for truck movement and access on the I-80 corridor, we are a prefect area for major manufacturing and distribution centers. IF we keep a good business climate.
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