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Travis County has approved an incentive agreement offering Tesla property tax rebates for the company's potential 4 to 5 million-square-foot factory.
On July 14, the Travis County Commissioners Court voted in a meeting to approve a 20-year performance-based incentive deal with Tesla. This agreement could encourage the company to build its next Gigafactory in Texas, rather than Oklahoma.
The deal promises that Tesla will receive a 70% rebate for maintenance and operations property taxes after the first $1.1 billion it invests in Travis County. The company will receive a 75% rebate for taxes associated with the second “incremental billion,” and 80% once the company exceeds $2 billion of investment. According to the deal, a majority of commissioners in Travis County voted in favor of providing the electric carmaker with a tax rebate worth at least $14.7 million.
“We really took these issues to heart and as a result made some changes,” Travis County Judge Sam Biscoe said before the members vote.
What Travis County is offering is in addition to what the Del Valle Independent School District voted to approve last week.
The school district’s deal involves agreeing to cap Tesla’s taxable property value at $80 million for 10 years. According to a calculation done by consultants, without the cap, the taxable value would be on average $600 million over 10 years.
By placing the cap, Tesla is projected to save about $50 million in taxes over 10 years. The city of Austin will also hear a presentation regarding Tesla on July 16.
“I think Austin very much fits in with the brand of Tesla. Tesla is a company that really brand itself as a company of the future. It’s aN IT company as much as it is an auto manufacturer, ”National site selection expert John Boyd said.
This agreement does not guarantee that Tesla will choose Texas for the construction of the Gigafactory. Oklahoma officials also offered incentives to a California company, but specific details have not been made public.
Tesla may announce the final location of its Cybertruck and Model Y Gigafactory during its Q2 2020 Earnings Call, scheduled for July 22. Texas and Oklahoma are that the last two states vying to be the home of Tesla’s next Gigafactory.
H/T @ray4tesla / TwitterFollow @EvaFoxU