Nevada approves $330M in Tesla tax breaks

CARSON CITY — Tesla is set to receive $330 million in tax abatements over the next 20 years after members of a state workforce development board approved the electric carmaker’s proposal Thursday morning.

Under the deal approved unanimously by members of the Governor’s Office of Economic Development board, Tesla will be exempt from paying payroll and property taxes for the next 10 years and would pay reduced sales taxes for the next 20 years.

Gov. Joe Lombardo, who chairs the board, praised the deal: “Hopefully this will be the model moving forward for the continued diversification of the state’s economy,” he said.

The board, which consists of Lombardo, Lt. Gov. Stavros Anthony, Secretary of State Cisco Aguilar and six people from the private sector, first received Tesla’s tax abatement application on Monday. The details of the package were previously kept confidential by a nondisclosure agreement between the state and the carmaker.

The new tax abatements follow Tesla’s announcement earlier this year that it plans to invest an estimated $3.6 billion to expand its operations in Northern Nevada, which include the 5.4-million-square-foot Gigafactory in Storey County.

The investment, which will include a new electric semi-truck manufacturing facility, is expected to create 3,000 jobs.

Tesla will also be eligible for an additional $81.4 million in tax reimbursements over the next two decades as part of a potential agreement with Storey County.

Storey County Manager Austin Osborne said during the hearing the Gigafactory has brought “countless” benefits to the region.

“Success of this partnership is evident by the rapid development and ongoing success of Tesla’s first Gigafactory at McCarran, Storey County, Nevada,” he said. “We’re asked if Storey County can meet these challenges of building another Gigafactory and our response is: This is what we do. We did it once.”

The project is also estimated to create more than 9,000 construction jobs and 5,800 additional indirect jobs through 2027, according to a release from the state. The investment is estimated to create $685 million in state and local revenues over the next 20 years.

But the continued investment in Nevada isn’t just about the state’s tax breaks for the electric carmaker, said Tesla Senior Global Director of Public Policy Rohan Patel.

“The reason why we want to locate even more and diversify investment in Nevada is not primarily because of an investment package or because of an incentive package,” Patel said to GOED members. “It’s in fact because our team really loves being in Nevada. We like the state. We like the workforce.”

Representatives from Tesla said the company is committed to “directly accelerating hundreds of additional workforce housing units,” an item they said would be reported on annually. Representatives also said they had found a provider who has committed to opening a childcare facility at the industrial park near Tesla’s property. The location will be able to support 200 families and will be open seven days a week to support shift schedules, the Tesla spokesperson said.

The company first received tax abatements from the state in 2014. Then-Gov. Brian Sandoval signed a bill that approved nearly $1.3 billion in tax incentives over 20 years, abatements that have benefited Tesla more than $140 million.

Bob Fulkerson, a former director of Progressive Leadership Alliance of Nevada and lifetime resident of Reno, slammed the board for approving the tax abatements.

“The public has been shut out of these proceedings, given us three days to look at this package and then you all get together and vote on a pro forma way,” Fulkerson said during the public comment portion of the meeting following the vote. “I think it’s a sham frankly. If this is a model for economic development — to give away our tax dollars to billionaires who don’t need it — I think that’s a bad model.”

Fulkerson complained that the state and the city had no plan to deal with the additional workers that the expanded factory would bring. He was the only person present who spoke in opposition to the package’s approval.

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