Tesla Giga Texas Seeks Foreign Trade Zone Designation, Would Save Six Figures in Yearly Taxes

Photo: Jeff Roberts/YouTube

Tesla is seeking to have Giga Texas designated as a foreign trade zone. This step would help the company save hundreds of thousands of dollars yearly in taxes.

Tesla has applied for a foreign trade zone designation for its factory near Austin, Texas. On February 23, Travis County commissioners offered support for the designation by approving a no-objection letter to the application, a critical step in moving the application forward, The Business Journal reported. The company also has to obtain a letter from Del Valle Independent School District. The U.S. Department of Commerce Foreign-Trade Zones Board will make a final decision.

The federal foreign trade zone program allows companies to reduce taxes on imported and exported goods in accordance with the county documents. This program allows imported inventory and inventory held for export in the foreign trade zone be exempt from ad valorem tax. According to county documents, the appointment could save Tesla $270,000 yearly in all taxing jurisdictions. This will be another source of tax savings for the car manufacturer.

Other companies that have been designated Foreign Trade Zones in the Austin area include Samsung, Flex, and HID Global.

In a letter to the federal Foreign-Trade Zones Board, Travis County Judge Andy Brown said Tesla's project covers more than 2,500 acres with the potential to expand to 3,500 acres, far more than previously stated in government filings. This indicates plans to further expand Tesla's Austin factory. Although documents filed with the Travis Central Appraisal District show that Tesla currently owns just over 2,500 acres east of Austin.

© 2021, Eva Fox. All rights reserved.

_____________________________

We appreciate your readership! Please share your thoughts in the comment section below.

Article edited by @SmokeyShorts, you can follow him on Twitter

Follow @EvaFoxU