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Tesla could get $330M in Nevada tax breaks

Updated February 28, 2023 - 6:42 am

RENO — Tesla could receive $330 million in tax abatements over the next 20 years as part of its proposed $3.6 billion factory expansion, according to documents released Monday.

The electric carmaker’s tax abatement application, which was released just three days before a state board is set to consider the tax incentives, proposes a deal under which Tesla would be exempt from paying payroll and property taxes for the next 10 years, and would pay reduced sales taxes for the next two decades.

The company is also eligible for an additional $81.4 million in tax reimbursements over 20 years as part of a potential agreement with Storey County. The reimbursements would not apply to the portion of the local sales tax that goes to support schools, however.

Negotiations for new tax abatements follow Tesla’s announcement earlier this year that it plans to invest an estimated $3.6 billion to expand its Northern Nevada operations, including a new electric semitruck manufacturing facility. The investment is expected to create 3,000 jobs and expand the company’s existing footprint in the state, which includes the 5.4-million-square-foot Gigafactory in Storey County.

The application will be considered on Thursday by the Governor’s Office of Economic Development board, which consists of Gov. Joe Lombardo, Lt. Gov. Stavros Anthony, Secretary of State Cisco Aguilar and six people from the private sector.

Details of the abatement package were previously obscured by a nondisclosure agreement between the state and Tesla, a process meant to keep negotiations private and out of the eye of competing states, according to economic development office spokesman Gregory Bortolin.

But the short timeline between the release of the details of the deal and the meeting to consider the abatements was slammed by state Sen. Dina Neal. The Democrat from North Las Vegas called on the state to delay its vote to give state lawmakers time to consider the deal during a committee meeting last week.

In a statement following the application’s release Monday, Neal said the three-day timeline is “insufficient.”

“There is little to no opportunity to explore how this deal may affect housing supply, public schools, public safety, and other vital government services in the region,” Neal said. “In the interest of transparency, I am renewing my call for the Governor’s Office of Economic Development to delay final consideration of these abatements for one month to give the public time to weigh in on the deal.”

But it’s not the first time Tesla has received a tax abatement from the state. Then-Gov. Brian Sandoval signed a bill in 2014 that approved nearly $1.3 billion in tax incentives over 20 years. Those abatements have benefited Tesla more than $140 million, according to a state report released last year.

Storey County Manager Austin Osborne said the first round of abatements have had a “positive” impact on the region.

“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,” he said.

Osborne said Storey County has not been involved in the negotiations between GOED and Tesla regarding the newest round of abatements.

Contact Taylor R. Avery at TAvery@reviewjournal.com. Follow @travery98 on Twitter.

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