LAS VEGAS (KLAS) — Tesla tax breaks from the state worth $330 million were approved Thursday in a vote by the Nevada Governor’s Office of Economic Development (GOED).
The approval came despite Democratic lawmakers’ requests for more time to review the $330,250,366 in tax abatements. State Senator Dina Neal, who represents parts of Las Vegas and North Las Vegas, criticized the timing earlier this week, when the deal was unveiled publicly for the first time.
The state crafted the deal for Tesla and kept terms secret as the electric vehicle maker announced in January that it was committing to a $3.6 billion expansion of its Gigafactory east of Reno.
Gov. Joe Lombardo and Tesla founder Elon Musk were on hand when expansion plans were announced. The project will bring about 3,000 new high-paying jobs to the area. A news release from GOED on Thursday said the average hourly wage of the new jobs would be $33.49.
“Tesla has far exceeded every promise they made going back to 2014,” Lombardo said. “To date, they have invested $6.2 billion in Nevada, built a 5.4 million square foot Gigafactory which provided 17,000 local construction jobs and created more than 11,000 highly paid permanent jobs.”
The site is in the Tahoe-Reno Industrial Complex in Storey County. In addition to the $330 million in tax breaks from the state, Tesla is expected to get a sales tax savings of $81.4 million over the next 20 years as part of the “economic diversification district” set up in 2014.
The bulk of the tax savings for Tesla comes from a tax abatement for personal and real property taxes over the next 10 years. That savings is valued at $246 million. The rest is in sales tax reductions over 20 years and an exception to paying Nevada’s Modified Business Tax over the next 10 years.
Sweetheart deals are sometimes brokered to attract investments in big projects, but Neal pointed to areas that the taxes could have supported: housing supply, public schools, public safety and other vital government services in the region.
The Gigafactory expansion will house Tesla “Semi” heavy duty truck production. It will also allow for expanded production of batteries.
The Tesla expansion could create an annual economic impact of $2.2 billion — or $38 billion over the next 20 years — according to GOED.
“Since the inception of GOED, the main goal has been to diversify Nevada’s economy,” said Tom Burns, GOED’s executive director. “The Nevada-Tesla partnership cemented a new economic sector in Nevada for the manufacturing of electric vehicle battery packs and drive units, and energy storage products. Tesla’s Gigafactory propelled Nevada’s manufacturing industry, establishing lithium-ion batteries as the state’s eighth largest export both nationally and internationally.”
